When Tech Giants Face the Pentagon’s Gavel: Alibaba, Baidu, BYD Eye “Military-Linked” Label
The Pentagon is reportedly pushing to brand three of China’s most prominent companies — Alibaba Group Holding, Baidu, Inc. and BYD Co. — as “military-linked,” a move that could shuffle the global perception of global-tech and auto titans. According to a letter dated Oct. 7, 2025 from Deputy Defense Secretary Stephen Feinberg, shared with lawmakers just weeks before a US–China trade truce, the three firms — along with five others — should be added to the so-called “1260H list,” which flags Chinese firms accused of aiding their military while operating in the United States. The letter was first reported by Bloomberg News. (Reuters)
⚠️ What’s at Stake — And Why It Matters
- The “1260H list” is a U.S. law-mandated roster of Chinese firms perceived to have ties to China’s armed forces. (Reuters)
- Inclusion doesn’t instantly trigger sanctions — but it carries serious reputational risk. For global business partners, banks, and investors, it effectively functions as a red flag. (Reuters)
- If added, Alibaba, Baidu, and BYD would join a growing roster of companies previously flagged, such as Tencent Holdings and CATL — both of which saw market reactions and increased scrutiny. (Reuters)
In his letter, Feinberg said that these firms, along with five others — Eoptolink Technology Inc., Hua Hong Semiconductor Ltd., RoboSense Technology Co., WuXi AppTec Co. and Zhongji Innolight Co. — “merit inclusion” under the statute. (Reuters)
So far, it remains unclear whether this recommendation has translated into official listing. The latest public update of the 1260H list — released earlier this year — does not include them. (Reuters)
Reactions — and What’s at Stake for the Firms
In response, Alibaba called the suggestion unfounded, stating in an email to Reuters that “there’s no basis to conclude that Alibaba should be placed on the Section 1260H List.” The company insisted it is neither a “military company” nor part of any military-civil fusion strategy. (Reuters)
While the immediate practical impact may be limited (no sanctions yet), being placed on the 1260H list could complicate these firms’ relationships with U.S. investors, cloud partners, and supply-chain collaborators — especially in sectors sensitive to national security. One former effect: previous tech firms and battery makers flagged have seen share-price jitters following listing. (The Business Times)
For firms like Alibaba and Baidu — which are aggressively expanding global ambitions in AI, cloud infrastructure, and e-commerce — and BYD, a leading electric vehicle and battery-manufacturing giant, this could undercut their efforts to deepen U.S. or international ties.
Wider Implications for Global Tech, Trade & Decoupling
This development reflects growing U.S. willingness to treat Chinese tech and manufacturing firms as potential extension of the state’s military apparatus. The move might accelerate — or at least reinforce — broader global decoupling trends: more companies and investors may avoid exposure to China-linked firms to reduce regulatory and reputational risk.
It also signals a shift in how corporate identity is judged in geopolitics: not just by products or stated lines of business, but by possible indirect support through supply-chain, investment, or services.
For U.S. and allied firms, even indirect relationships — cloud hosting, data storage, financing — could be scrutinized more heavily when Chinese partners are on such watch-lists.
Glossary
Section 1260H list — A U.S.-law mandated registry of Chinese firms identified as having links to China’s military or defense apparatus, warning U.S. entities and investors of increased risk in conducting business with them. (Reuters) Military-civil fusion — A strategy in which civilian companies and technologies are leveraged to support, directly or indirectly, a country’s military capabilities. Inclusion on the 1260H list often arises from allegations of such ties. Reputational risk — The danger that a company’s reputation will suffer due to negative public perception or regulatory scrutiny, which can result in loss of business, partnerships, or investor confidence.
Why It Matters
Cross-border tech and industrial ties are already delicate. As geopolitical fault lines deepen, reputational and compliance risk may matter as much as tariffs or export controls. For global investors, supply-chain managers, and tech partners — awareness and due diligence are becoming essential.
Source: Reuters article on Pentagon’s recommendation. (Reuters)
