Chinese artificial intelligence hardware stocks slumped on Wednesday after news that the Trump administration is drafting a ban on U.S. imports of new models of Chinese data centre components. The CSI300 Telecommunication Services Index tumbled 6% in early trading. Export-dependent data centre component makers including Zhongji Innolight, Eoptolink Technology and Suzhou TFC Optical Communications all opened sharply lower. The U.S. government is working on a measure to bar imports of new Chinese optical transceivers, which allow data to travel over fibre-optic cables at the speed of light within data centres, Reuters reported. The news threatens to hit already shaky confidence in China’s AI hardware stocks after a savage sell-off. Zhongji Innolight shares fell roughly 8% in both Shanghai and Hong Kong in early trading. The Chinese optical parts maker generated 62% of its revenue from the U.S. in the first quarter.