Alibaba, one of China’s most valuable technology companies, sued the U.S. Department of Defense, challenging the Pentagon’s decision to designate it as a company affiliated with the Chinese military.
Best known internationally for its e-commerce business, Alibaba has also become a major cloud-computing provider and one of China’s leading developers of advanced artificial intelligence systems. In a lawsuit filed on Tuesday in Federal District Court in the Northern District of California, the company said it had no ties to the Chinese military and argued that the Pentagon had acted unlawfully in labeling it as such.
Earlier this month, the United States added Alibaba to a list of companies that Washington says support China’s military. Also added were several of China’s most strategically important firms, including manufacturers of electric vehicles, memory chips, robots and pharmaceuticals. The E.V. maker BYD and the robotics firm Unitree were also included in the list.
The designation effectively bars Alibaba from doing business with the Pentagon. It also restricts the Pentagon from doing business with firms that engage lobbyists on behalf of companies on the list.
The move risks further inflaming tensions between Washington and Beijing, only weeks after President Trump met with Xi Jinping, China’s leader, in an effort to stabilize economic and political relations. Over the past 18 months, the world’s two largest economies have clashed over tariffs, trade and control over critical technology supply chains.
China’s Ministry of Commerce said earlier this month that the Pentagon’s decision had jeopardized the fragile truce reached by the two leaders. The U.S. side had “disregarded the consensus” reached between the two leaders, abused its power and threatened the stability of global supply chains, the ministry said in a statement.
Alibaba, which also named Defense Secretary Pete Hegseth as a defendant in the lawsuit, said the designation had already inflicted significant reputational harm and cost it business partners, including lobbying firms.
The company also argued that the Pentagon had violated its First Amendment rights.
“The designation thus does not merely impose commercial costs — it strips Alibaba of its ability to speak, to petition the government through its chosen representatives,” the lawsuit said.
The Defense Department did not immediately respond to a request for comment.
Alibaba said it is not licensed to supply products to China’s military and it does not participate in Chinese or U.S. military procurement programs.
The company further argued that the Pentagon had misconstrued its relationship with China’s Ministry of Industry and Information Technology, one of the country’s primary internet regulators. Alibaba said its dealings with the ministry are no different from those of any other technology firm operating in China.
“The relationship is no different from Alibaba’s dealings with United States government agencies. A regulator is not an affiliate,” the company said.
Xinyun Wu contributed reporting from Taipei.
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