Chinese e-commerce giant Alibaba has filed a lawsuit against the US government seeking removal from a Pentagon blacklist that labels the company as having ties to China's military. According to reports from the BBC and Business Standard, the lawsuit was filed in the San Jose division of the US District Court in the Northern District of California on Tuesday, challenging the US Department of Defense's decision to place Alibaba on its '1260H list' — a roster of companies that Washington believes support China's military-industrial complex through the country's military-civil fusion strategy. The company has now escalated its legal action, suing the US government on Tuesday to get off the blacklist, citing weak evidence and business harm as key grounds for removal. As per the latest court filing, Alibaba specifically argues that the designation is unsupported and has caused harm to its business and reputation. In its latest legal filing, Alibaba specifically argues that the designation is unsupported and has caused harm to its business and reputation.
Alibaba has strongly denied the allegations, arguing that the designation is 'arbitrary and capricious' and has 'no basis in fact or law', as reported by the BBC and Business Standard. The company told the BBC that it is 'not a Chinese military company nor part of any military-civil fusion strategy', adding that multinational firms operating in China, including American companies, are subject to the same regulatory requirements. The company emphasized that its core businesses are focused on e-commerce, cloud computing and digital services rather than military or intelligence activities. In its latest legal filing, Alibaba specifically argues that the designation is unsupported and has caused harm to its business and reputation. The company stated that 'Its products and services are built for retail, logistics, and enterprise information technology — not weapons, defense, or intelligence' and that it is 'governed by an independent board, none of whom has any military affiliation'. Alibaba has also argued that it is 'governed by an independent board and holds no military certification or license' and that it has 'no relationship with the Assets Supervision and Administration Commission'.
The legal challenge comes after the Pentagon expanded the blacklist to include several major Chinese companies, including Baidu, BYD, Nio, Unitree Robotics, TP-Link and other firms in artificial intelligence, biotechnology and solar sectors. According to the BBC report, the Defense Department contends that Alibaba's compliance with Chinese technology regulations effectively makes it a contributor to China's defence industrial base. Business Standard reports that the current list includes 188 entities ranging from state-owned defence businesses, to private-sector tech companies like Alibaba and the robotics company Unitree. The Pentagon's list of designated 'Chinese military companies' has risen to include 188 firms, up from 134 in 2025, as the US ratchets up pressure on the Chinese tech sector. The designations have drawn protests from both the Chinese government and some of the targeted companies, with Beijing announcing sanctions on 10 American military-related companies on Monday, raising the risk of elevating tensions between the two countries.
In its latest filing, Alibaba has expanded its legal arguments to include constitutional violations, claiming that the Pentagon's move violated constitutional due process and the company's right to free speech. According to the complaint, Alibaba had previously asked to meet with the agency to address the Chinese military affiliation concerns, which included presenting evidence of its US economic contributions. However, the tech giant says that even after its submissions, the agency did not raise any concerns with the firm nor did it request additional information. Rather, it 'designated Alibaba without notice or a fair hearing', the compliant notes. The Pentagon accused Alibaba of being 'a military-civil fusion contributor to the Chinese defense industrial base because it is affiliated with MIIT', an acronym for China's Ministry of Industry and Information Technology. Business Standard reports that Alibaba has argued that 'A regulator is not an affiliate' and that like all companies operating in China, including US companies, regulatory compliance with the ministry is mandatory. A US judge last year ruled against DJI Technology, a Chinese drone maker, in its bid to be removed from the Pentagon's list, with DJI currently appealing the case.
While inclusion on the Pentagon's blacklist does not trigger immediate sanctions, it carries significant operational consequences. Starting next week, the Pentagon is legally banned from doing business with any blacklisted firm, as reported by the BBC. Crucially, the law also extends to any US contractor that shares a lobbyist or law firm with a blacklisted entity. In Alibaba's case, the company argues that this restriction creates a functional blockade, forcing its long-term American advisers to sever ties to protect their own lucrative defence contracts. The rule effectively strips the company of its political and legal voice in Washington at the exact moment it needs to defend itself. Starting in 2027, the Pentagon will also be prohibited from 'contracting for goods and services' from such groups, even if they arrive through a third party, as reported by multiple sources. Alibaba has specifically argued that it is 'losing backers in the US' and that the damage is significant because the company depends on the trust of its US partners.
