This article first appeared on GuruFocus.
The narrative around Chinese tech just picked up a sharper edge. Bloomberg reporting indicates the Pentagon has concluded that Alibaba Group Holding (NYSE:BABA), Baidu Inc (BIDU), and BYD Co (BYDDF) could be candidates for Washington’s Section 1260H list, the roster of firms the U.S. believes may assist China’s military. Deputy Defense Secretary Stephen Feinberg laid out the view in an October 7 letter to lawmakers, weeks before Presidents Donald Trump and Xi Jinping reached their trade truce. The companies have not been confirmed as newly added, but even the possibility could be interpreted as a signal that Washington’s risk lens is shifting again.
The Pentagon’s assessment stretches beyond the headline trio, touching Eoptolink Technology, Hua Hong Semiconductor, RoboSense Technology, WuXi AppTec, and Zhongji Innolight. The list’s last update in January featured 134 Chinese companies and functions more as a caution light than a direct restriction, since the designation does not trigger immediate bans. Still, a move like this could influence how U.S. investors weigh long-term engagement with Chinese technology platforms at a time when geopolitical crosswinds appear to be intensifying. Pentagon officials, along with Baidu and BYD, did not respond to Reuters’ requests for comment.
Alibaba pushed back with a confident tone, stating there is no basis for its inclusion on the 1260H list and stressing that it is neither a Chinese military company nor involved in military-civil fusion. It added that even if placed on the list, its global business operations, including in the United States, would remain unaffected, as it does not engage in U.S. military procurement. For investors, the development could be another reminder that the regulatory landscape between Washington and Beijing remains fluid, and any recalibrationformal or notmay shape how capital allocators think about risk, reputation, and long-term positioning in China’s technology sector.