Alibaba, WuXi AppTec sue US Defense Department over 'Chinese military company' designation

Chinese tech giant Alibaba has filed a lawsuit against the US Department of Defense over its designation as a "Chinese military company," joining biotech firm WuXi AppTec, which filed a similar suit earlier. The legal challenges reflect an intensifying US-China technology rivalry that has now spilled into the courtroom.

Alibaba filed suit Monday in federal court in San Jose, California, seeking removal from the Pentagon's list of companies said to support the Chinese military, according to Reuters.

"The determination is without basis in fact or law," Alibaba said in the complaint, adding that the company is governed by an independent board of directors with no members connected to the military. "Alibaba's products and services are designed for retail, logistics and enterprise information technology — not for weapons, defense or intelligence activities," it said.

The company also argued that the designation effectively brands it as an instrument of the Chinese military and a threat to US national security. "This damages Alibaba's reputation and casts a shadow over every US relationship the company maintains," it said.

The Defense Department added Alibaba to its so-called 1260H list — a blacklist of companies said to support the Chinese military — on June 8, along with Chinese tech giant Baidu, electric vehicle manufacturers BYD and Nio, and biotech firm WuXi AppTec. The updated list named 188 companies in total.

The Pentagon cited each company's direct or indirect ties to China's State-owned Assets Supervision and Administration Commission or the Ministry of Industry and Information Technology as grounds for the designation. Inclusion on the list does not immediately trigger sanctions or export controls, but listed companies are likely to be excluded from future Defense Department contracts and procurement projects.

WuXi AppTec filed a similar lawsuit in the US District Court for the District of Columbia on June 11, arguing that the Pentagon's decision was wrong and did not meet the factual or legal standards required under applicable laws and precedents.

While Chinese companies have moved quickly to challenge the designations in court, the legal road ahead looks difficult. Drone maker DJI lost a similar case last year, setting an unfavorable precedent.

DJI was added to the Pentagon's list of Chinese military-linked companies in October 2022 and filed suit two years later, in October 2024, seeking its removal. The company argued the designation had branded it a national security threat and blocked it from contracts with multiple federal agencies.

A federal judge in Washington rejected the suit. US District Judge Paul Friedman ruled that substantial evidence supported the Defense Department's finding that DJI contributes to China's defense industrial base.