Alibaba shares tumbled 5% Friday after reports surfaced that the Pentagon would add the company to its military blacklist. The selloff continued Monday with another 3% drop in Hong Kong.
Alibaba Group Holding Limited, BABA
The chaos began when the Pentagon briefly published an updated 1260H list on the US Federal Register. The document named Alibaba, Baidu, Tencent, and BYD as companies allegedly supporting China’s military.
Minutes later, the Pentagon pulled the list. No explanation was given for the withdrawal.
The document was marked “unpublished” after disappearing from public view. Two Chinese memory chip companies, ChangXin Memory Technologies and Yangtze Memory Technologies, were also scrubbed from the roster.
Baidu stock fell 2% Friday and dropped another 1% Monday. BYD shares declined 1% during Hong Kong trading.
Alibaba didn’t hold back in its response. The company said it’s “not a Chinese military company nor part of any military-civil fusion strategy.”
The e-commerce giant promised to pursue all available legal options. “We will take all available legal action against attempts to misrepresent our company,” the statement read.
Baidu issued an equally strong denial. “We categorically reject the inclusion, which has no credible basis,” a spokesperson said.
The search giant emphasized that no evidence exists linking it to military operations. “The suggestion that Baidu is a military company is entirely baseless and no evidence has been produced that would prove otherwise.”
BYD remained silent on the matter. The electric vehicle maker didn’t respond to requests for comment.
The 1260H designation doesn’t trigger immediate sanctions. But it carries real consequences for Chinese companies.
The Pentagon uses the list to block companies from military contracts. It also restricts access to research funding from government agencies.
US investors view the designation as a major red flag. The listing often precedes harsher trade restrictions down the line.
The roster has grown since its 2021 debut. More than 130 Chinese entities now face the military-linked designation.
Companies span multiple industries. Airlines, hardware manufacturers, construction firms, and shipping companies all appear on the list.
The timing couldn’t be worse for US-China tech relations. Washington continues debating how aggressively to target Chinese technology companies.
Three of China’s AI powerhouses—Alibaba, Baidu, and Tencent—all face potential designation. BYD’s inclusion marks the first time the list has targeted China’s electric vehicle sector.
Beijing is expected to retaliate. Chinese officials have consistently protested similar designations as politically motivated attacks.
Several companies have already sued the US government over their inclusion. The legal challenges argue the designations lack proper evidence and due process.
The brief publication and quick reversal created market confusion. Investors remain uncertain which companies will ultimately face designation when the Pentagon releases its final list.
The post Alibaba (BABA) Stock Slides 5% on Pentagon Blacklist Drama appeared first on Blockonomi.
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