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The Pentagon added Chinese technology giants Alibaba and Baidu, along with electric vehicle maker BYD, to a blacklist of firms it says support China's military on Monday.
The updated designations were published as part of the Defense Department's annual 1260H list, which identifies Chinese firms Washington believes are linked to the People's Liberation Army or China's military-civil fusion strategy.
The update also restores memory chipmakers ChangXin Memory Technologies and Yangtze Memory Technologies, which appeared on an earlier version of the list that was briefly published in February before being withdrawn. Other additions include pharmaceutical company WuXi AppTec and humanoid robotics startup Unitree.
With the latest revision, Washington has now designated all three of China's leading artificial intelligence firms, Alibaba, Baidu, and Tencent, as companies it alleges support the Chinese military. Tencent was added in 2025.
Baidu pushed back against the designation, describing the accusations as unfounded. "The suggestion that Baidu is a military company is entirely baseless," a company spokesperson said. "We will not hesitate to use all options available to us to have the company removed from the list."
Alibaba also challenged the decision and signaled possible legal action. "There is no basis to conclude that Alibaba Group should be placed on the CMC List. Alibaba Group is not a Chinese military company nor part of any military-civil fusion strategy," the company said in a statement.
The Pentagon's 1260H list does not automatically impose broad sanctions on listed companies. However, inclusion can restrict access to certain U.S. military contracts and research funding opportunities while serving as a warning to investors and government agencies. The designation is also widely viewed as a possible precursor to tougher trade, investment or export restrictions.
The move comes weeks after U.S. President Donald Trump met Chinese President Xi Jinping in Beijing in May, where both sides sought to keep relations stable. Trump has since invited Xi to Washington for a visit in September.
First introduced in 2021, the 1260H list now includes more than 100 Chinese companies spanning sectors such as semiconductors, communications, aviation, construction, shipping and artificial intelligence.
To be included, a company must operate directly or indirectly in the United States and be assessed by the Pentagon as contributing to China's military or defense industrial base.
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