Microsoft Closes at $543 Amid Pressure Over AI Data Center Components

Key Facts

Microsoft shares closed at $543 on November 10, alongside a Reuters report that the company is pressing the Trump administration to halt plans to ban imports from China of a key component used in AI data centers. The agency cited three people familiar with the matter as saying the company is seeking to persuade the administration to abandon the plans. The report puts supply issues at the center of a debate over the expansion of computing infrastructure, as data centers use optical transceivers to move data over fiber-optic cables. The component matters because AI chips alone are not enough to operate data centers if they cannot be connected and exchange data. The report did not establish that Microsoft relies on any specific Chinese component in its infrastructure; it addressed the potential ban's impact on the broader supply chain.

According to Cleanview data cited by Reuters, Microsoft had 35 data centers under construction in the United States, with another 134 planned. The potential expansion provides context for the company's pressure over components, because the availability of optical interconnects affects the outfitting and operation of data centers. The vice president of policy and general counsel at the Information Technology Industry Council said the ban could severely slow data center expansion. He added that AI chips bought by companies could remain unused without optical transceivers, saying they "could just be sitting there, waiting, without being used." The warning links spending on chips to the ability to operate them in connected facilities, rather than to processor availability alone as a measure of computing expansion.

Reuters says the U.S. Federal Communications Commission is working on the ban, and that a threshold of 3.2 terabits per second was under consideration, according to an October memo cited by the report. The threshold relates to a class of transceivers capable of handling that capacity, but production is not expected to scale up before 2028. Large-scale installation, meanwhile, is projected in the report to be likely in 2029. These proposed dates give the debate implications beyond the immediate effect of any decision, as potential restrictions concern components used in the data centers of the future. The gap between the expected production increase and widespread installation also shows the length of the supply and installation cycle that could be affected by restrictions.

U.S. concerns, according to Reuters, center on the possibility that the devices could be used for espionage, to plant malware or to disrupt service in U.S. data centers. In contrast, the report cited Counterpoint Research as saying China accounts for two-thirds of the global optical transceiver market. A report by the Foundation for American Innovation said U.S. producers Coherent and Lumentum lack enough production capacity to replace Chinese suppliers. These considerations put national security concerns up against worries about component availability and the ability to expand domestic production. Microsoft, according to Reuters, was among a limited group of companies that met officials from the White House Office of Science and Technology Policy and the National Security Council in September to outline supply-chain challenges the ban could cause.

In a parallel development, Anthropic's preliminary filing with the U.S. Securities and Exchange Commission says seven companies, including Microsoft, will buy Class N shares worth a total of $26 billion through a private placement alongside the planned IPO. Microsoft's stake is about $1 billion at the assumed IPO price, with the transaction subject to completion of the IPO and certain conditions. This shows an investment commitment from Microsoft in an AI company, alongside competition over enterprise applications and the infrastructure that runs them. Anthropic said the proceeds would be used for general purposes, including working capital, operating expenses and capital expenditures. It added that capital expenditures would include investment in computing, infrastructure and hiring.

The moves come in a market where both companies are growing through AI and cloud services. Microsoft's revenue reached $331.8 billion in fiscal 2026, up 18% from the previous year, while revenue from Azure and other cloud services rose 41% year over year. According to Reuters, Anthropic's revenue in the third quarter increased 47% from the previous quarter to $16.96 billion, compared with growth of 144% in the second quarter. The number of Anthropic customers that each generated at least $100,000 in revenue over 12 months exceeded 11,900 as of September 30, compared with more than 1,500 at the end of 2025. The figures bring together growth in Microsoft's cloud business and the expanding corporate customer base at Anthropic, as commercial competition intersects with Microsoft's disclosed investment.

Regarding the planned IPO, the Associated Press reported that Anthropic would offer 825 million shares at $70 to $78 per share, potentially raising more than $61 billion if priced at the midpoint of the range. Trading in the stock was expected to begin during the month, according to the report. Microsoft's purchase of private-placement shares remains subject to completion of the IPO and the conditions in the filing, while Anthropic said the proceeds would support operating needs and investment in computing and infrastructure. As for optical components, the dates in the Reuters report continue to point to increased production of the class under consideration in 2028 and widespread installation in 2029. The report did not cite a final decision on the ban.