Alibaba Group Holding Ltd. (BABA) spearheaded a decline in Chinese technology stocks after the US Pentagon added several major firms to a list of companies alleged to be assisting China’s military — before abruptly withdrawing the updated roster minutes later without explanation.
Shares of Alibaba fell more than 3% in Hong Kong trading. BYD Co. and Baidu Inc. each declined around 1%, News.Az reports, citing Bloomberg.
All three companies had appeared on the revised Pentagon list published on the US Federal Register, which was subsequently marked as “unpublished.” The Defense Department also removed two leading Chinese memory-chip makers — ChangXin Memory Technologies Inc. and Yangtze Memory Technologies Co. — from the same document.
The developments come at a sensitive moment in Washington’s ongoing debate over China-related technology policy. The US government has now stated that three of China’s prominent artificial intelligence companies — Alibaba, Baidu and Tencent Holdings Ltd. — are supporting the country’s military. Their inclusion is widely expected to draw a strong response from Beijing. The addition of BYD places China’s leading electric-vehicle manufacturer under similar scrutiny.
Although placement on the list does not automatically trigger direct legal penalties, the Pentagon has increasingly used it as a tool to limit companies’ ability to secure US military contracts or access research funding. The so-called “1260H” designation is also viewed as a cautionary signal to American investors and is often regarded as a precursor to tougher trade or investment restrictions.
Alibaba rejected the characterization in a statement, asserting that it is “not a Chinese military company nor part of any military-civil fusion strategy,” and pledged to pursue all available legal avenues to challenge what it described as misrepresentation.
A Baidu spokesperson similarly dismissed the inclusion, stating that the company “categorically reject[s] the inclusion,” calling it baseless and unsupported by evidence.
BYD, headquartered in Shenzhen, did not respond to requests for comment sent outside regular business hours.
First introduced in 2021, the 1260H list now contains more than 130 entities accused of ties to the Chinese military. The roster spans a wide range of sectors, including airlines, computer hardware producers, construction firms, shipping companies and telecommunications providers.
