Alibaba, one of China’s most valuable technology companies, sued the US 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 provider of cloud computing and one of China’s leading developers of advanced artificial intelligence systems. In a lawsuit filed 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 illegally by labeling it as such.
Earlier this month, the US added Alibaba to a list of companies Washington says support China’s military. Also added were several of China’s most strategically important companies, including makers of electric vehicles, memory chips, robots and pharmaceuticals. Electric car manufacturer BYD and robotics company Unitree were also included in the list.
The designation effectively prevents 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, just weeks after President Trump met with Xi Jinping, China’s leader, in a bid to stabilize economic and political ties. Over the past 18 months, the world’s two largest economies have clashed over tariffs, trade and control of critical technology supply chains.
China’s Ministry of Commerce said earlier this month that the Pentagon’s decision had jeopardized the fragile ceasefire reached by the two leaders. The US 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 caused significant reputational damage and cost business partners, including lobbying firms.
The company also claimed that the Pentagon had violated its First Amendment rights.
“Thus, the designation not only imposes commercial costs — it deprives Alibaba of its ability to speak, to petition the government through its elected representatives,” the lawsuit said.
The Ministry of Defense did not immediately respond to a request for comment.
Alibaba said it is not licensed to supply products to China’s military and does not participate in Chinese or US military procurement programs.
The company further claimed that the Pentagon had misunderstood its relationship with China’s Ministry of Industry and Information Technology, one of the country’s primary internet regulators. Alibaba said its relationship with the ministry is no different from other technology firms operating in China.
“The relationship is no different from Alibaba’s dealings with US government agencies. A regulator is not an affiliate,” the company said.
Xinyun Wu contributed reporting from Taipei.
