Alibaba Group Holding (BABA) shares dropped five percent Thursday after reports the Trump administration will add the Chinese e-commerce giant to a Pentagon list of firms allegedly aiding China’s military1.
The potential blacklisting could limit Alibaba’s dealings with U.S. government suppliers and increase scrutiny from American partners like Apple, creating new regulatory headwinds for the company’s growth prospects2.
Key Takeaways
- Trump administration expected to add Alibaba to Pentagon blacklist Friday
- Stock fell five percent on potential U.S. business restrictions
- Move could affect partnerships with American technology companies
Market Reaction & Context
Alibaba’s stock decline comes as other Chinese technology companies face similar regulatory pressures from Washington. The Trump administration is expected to add multiple firms, including search engine Baidu and electric vehicle maker BYD, to the so-called 1260H list as soon as Friday3.
The Pentagon list, formally known as Section 1260H, identifies companies that U.S. officials believe provide support to China’s military modernization efforts. Being included can restrict access to American capital markets and government contracts4.
Detailed Analysis
The Pentagon concluded in November that Alibaba, along with Baidu and BYD, should be added to the military aid list, according to previous reports5. U.S. officials have expressed concerns that technology deals involving these companies could enhance China’s artificial intelligence capabilities for surveillance and military applications6.
Lawmakers had previously urged Defense Secretary Pete Hegseth to include Alibaba and other Chinese firms on the Department of Defense’s list of Chinese military companies7. The designation could complicate Alibaba’s relationships with U.S. technology partners and suppliers.
Business Impact
The potential listing threatens to create new obstacles for Alibaba’s international expansion and partnerships with American companies. The restrictions could limit the company’s access to U.S. government-related business opportunities and increase compliance costs.
Alibaba has not immediately responded to requests for comment regarding the expected Pentagon designation. The company’s cloud computing and artificial intelligence services have been areas of particular growth and international focus.
Regulatory Environment
The move represents the latest escalation in U.S.-China technology tensions under the Trump administration. Chinese technology companies have faced increasing scrutiny over national security concerns, with officials worried about potential military applications of civilian technologies.
The timing of the expected announcement, coming on a Friday, follows a pattern of significant regulatory actions being released at the end of the business week. Investors will be watching for any formal confirmation from the Pentagon or administration officials.
Not investment advice. For informational purposes only.
References
1“US expected to add Alibaba and others to list of firms allegedly aiding China’s military, sources say”. Reuters. Retrieved February 13, 2026.
2“Lawmakers ask Hegseth to add Alibaba, others to DoD’s list of Chinese military companies”. Seeking Alpha. Retrieved February 13, 2026.
3“US expected to add Alibaba and others to list of firms allegedly aiding China’s military”. Yahoo Finance. Retrieved February 13, 2026.
4“U.S. expected to add companies including Alibaba to Pentagon list of firms allegedly aiding Chinese military”. MarketScreener. Retrieved February 13, 2026.
5“Pentagon suggests adding Alibaba, Baidu, BYD to list for aiding China military”. WHBL. Retrieved February 13, 2026.
6“White House says Alibaba provides tech support to Chinese military”. Facebook/MSNBC News Junkies. Retrieved February 13, 2026.
7“Alibaba stock falls 5% on potential Pentagon blacklisting”. Yahoo Finance Canada. Retrieved February 13, 2026.