Shares of China’s biggest AI winners, Zhongji Innolight and Eoptolink, fell after Reuters reported that the US FCC might ban Chinese optical transceivers from data centres. The stocks slid 8.6% and 6.9%, pulling the CSI 300 telecoms index down as much as 9% before narrowing to about 4% lower.

Both firms have been hit hard by a broader sell‑off of AI “picks and shovels” that hit memory‑chip makers. They are among China’s top performers from the AI build‑out, having surged roughly 4,500% since the start of 2023 and generating most of their revenue overseas.

Last year, Innolight’s net profit rose to Rmb10.8bn ($1.6bn) from Rmb2.2bn in 2023, while Eoptolink’s profits climbed from Rmb688mn to Rmb9.5bn. More than 90% of Innolight’s Rmb38.2bn revenue came from outside China, with Eoptolink’s share at 96%.

Kenny Ng of Everbright Securities International warned that continued US restrictions will push China to accelerate its push for self‑reliance in key technologies, while the FCC has yet to comment.