Alibaba, Baidu, and BYD are now tied to a new U.S. defense warning after the Pentagon concluded the three companies should be added to a federal list that tracks firms accused of aiding China’s military.
The conclusion was sent to Congress in a letter dated October 7, about three weeks before Donald Trump and Xi Jinping met in South Korea and agreed to a broad trade truce. The letter was delivered to the heads of the House and Senate Armed Services Committees, and its contents became public according to Bloomberg.
The letter said it was still unclear whether the companies had already been formally added to the Pentagon’s Section 1260H list. That list carries no direct legal penalties, but it works as a strong warning to U.S. investors about military ties.
The list is published once a year. The most recent version was updated in January, before Donald returned to the White House, and it does not include the companies named in the October letter.
Pentagon flags eight Chinese firms for military ties
In the letter, Deputy Defense Secretary Stephen Feinberg told lawmakers that eight companies meet the legal standard for being labeled “Chinese military companies.”
Along with Alibaba, Baidu, and BYD, the list also named Eoptolink Technology, Hua Hong Semiconductor, RoboSense Technology, WuXi AppTec, and Zhongji Innolight. The statute covers businesses linked to China’s military that operate in the United States.
“In our review of the latest information available, the Department has identified eight entities that it has determined are ‘Chinese military companies’ in accordance with the statute that should be added to the 1260H list,” Stephen wrote in the letter.
The letter was sent before the October 30 summit between Donald and Xi. During that meeting, both leaders agreed on a package of steps that included lower tariffs and commitments to pause certain export controls.
China reacted through its Foreign Ministry, which rejected the U.S. position in strong terms. “China has consistently opposed the US practice of overbroadly defining national security, establishing discriminatory lists under various pretexts, and unjustifiably suppressing Chinese enterprises,” the ministry said. It added, “We urge the US to immediately correct its erroneous actions, and will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises.” None of the Chinese companies named issued public comments.
The market impact of this list is already known. When several major Chinese firms were added in January, stocks dropped across the sector. Tencent fell, and Contemporary Amperex Technology also took a hit. That company supplies batteries to Tesla and other automakers.
A similar reaction could hit companies tied to artificial intelligence, semiconductors, robotics, and electric vehicles if the new names are formally added. For Alibaba, the risk lands as it pushes harder into global AI competition.
Congress calls AI leaders to testify over cyber espionage
As the Pentagon letter moved through Congress, another front opened on Capitol Hill. A U.S. House committee is calling on Anthropic CEO Dario Amodei to testify about a Chinese cyber-espionage attack the company revealed earlier this month.
Leaders of the House Homeland Security Committee asked Dario to appear on December 17 to discuss the rise of AI-run cyberattacks.
The same request went to Google Cloud CEO Thomas Kurian and Quantum Xchange CEO Eddy Zervigon.
Anthropic did not respond to a request for comment. In a blog post dated November 13, the company said it disrupted a complex espionage campaign tied to China that used its Claude chatbot.
The company described it as “the first reported AI-orchestrated cyber espionage campaign.” Anthropic said the state-sponsored group used Claude to attempt infiltration into thirty global targets and succeeded in a small number of cases.
“The operation targeted large tech companies, financial institutions, chemical manufacturing companies, and government agencies,” the company said. “We believe this is the first documented case of a large-scale cyberattack executed without substantial human intervention.”
Sharpen your strategy with mentorship + daily ideas – 30 days free access to our trading program
Source: https://www.cryptopolitan.com/u-s-alibaba-baidu-byd-aiding-chinas-military/