Uncle Sam strains to thread the AI safety needle

Chinese companies accounted for more than half of global optical transceiver shipments last year, according to technology market research outfit TrendForce. Zhongji Innolight 300308.SZ, valued at over $150 billion, said in the prospectus for its recent Hong Kong listing that it accounts for 28% of the market.

Key details remain unclear, and a ban that only affects new products rather than existing ones may mitigate the impact. Still, the proliferating array of AI chips getting stuffed into data centers – with Alphabet’s GOOGL.O TPUs and Amazon.com’s AMZN.O Trainium silicon jostling with Nvidia’s NVDA.O graphics processors – means that demand is running exceptionally high. Supply is falling short by as much as 60% for certain kinds of transceivers, according to a study by from last year. U.S. companies like $65 billion Coherent COHR.N and $66 billion Lumentum LITE.O, as well as Europe’s Nokia NOKIA.HE, may benefit as alternative suppliers. But here as elsewhere companies could be wrong-footed by China’s stranglehold over key minerals.