Chinese technology and e-commerce group Alibaba has sued the US Department of Defense, asking a federal court to strike it from a Pentagon roster of companies the US government says are linked to China's military, according to multiple news reports and the company's own statement.
The lawsuit, filed on Tuesday in the US District Court for the Northern District of California, challenges Alibaba's inclusion on the Pentagon's so-called Section 1260H list of "Chinese military companies."
What the list is
Section 1260H refers to a list, mandated by the National Defense Authorization Act for fiscal year 2021 and maintained by the Department of Defense, that names companies the Pentagon identifies as Chinese military companies operating in the United States. The Pentagon expanded the list on June 8 to 188 entities, up from 134 the previous year, according to CNBC and Al Jazeera.
Alibaba was added in that June 8 update. Reports say the Pentagon designated it a "military-civil fusion contributor" to China's defense industrial base, citing the company's affiliation with China's Ministry of Industry and Information Technology and an indirect link to the state asset regulator known as SASAC, per Al Jazeera.
The designation is distinct from formal economic sanctions such as the US Commerce Department's Entity List, and inclusion does not by itself bar American firms from doing business with a listed company. Its main effects are reputational and contractual: the Pentagon is barred from contracting directly with listed firms and, from 2027, from procuring their goods or services even through third parties, according to Al Jazeera.
Alibaba's argument
In its filing and a public statement, Alibaba says the designation is wrong and damaging, arguing it violates the company's constitutional rights to due process and free speech. The determinations "have no basis in fact or law," the company said, describing the decision as "arbitrary and capricious" and arguing it has caused "irreparable harm," according to PYMNTS and Al Jazeera. The company said the Defense Department did not respond to evidence it had presented showing it was not a supporter of the Chinese military.
Alibaba also disputed any military connection, saying its board has no military affiliation and that its products and services are built "for retail, logistics, and enterprise information technology — not weapons, defense, or intelligence." newsparlor could not independently verify the Pentagon's evidentiary basis for the designation, nor review the court filing.
The US position
The Department of Defense has not publicly detailed its case against Alibaba beyond the listing rationale. A Pentagon spokesperson declined to comment, saying the agency does not discuss pending litigation. US officials have broadly defended the 1260H list as a tool mandated by Congress to flag companies that, in the government's assessment, support Beijing's effort to channel civilian technology toward military uses — a strategy Washington calls "military-civil fusion." Beijing and the named companies reject that characterization.
A widening dispute
Alibaba is not alone. The June 8 update also named other large Chinese firms, including the search company Baidu and electric-vehicle maker BYD, and the pharmaceutical-services firm WuXi AppTec filed a similar suit earlier in June, according to reporting on the listings. The action follows years of US designations that have swept in dozens of major Chinese companies, part of broader tensions between Washington and Beijing over technology and security.
Legal challenges to the list have succeeded before. Smartphone maker Xiaomi was placed on a predecessor list in early 2021 and sued; a federal judge granted a preliminary injunction, finding the Defense Department had not developed sufficient evidence, and the Pentagon agreed to remove Xiaomi later that year. The court has not yet ruled on Alibaba's request, and neither the company's claims nor the Pentagon's underlying assessment has been tested in court.
