Tencent Shares Dive 7% After US Allegations of Military Links Spark Global Scrutiny

• The U.S. Department of Defense has added Tencent Holdings to a list alleging it works with the Chinese military.
• Tencent has claimed it was mistakenly added and is not a “military company.”
• Shares in the Chinese multinational company fell 7% following its inclusion.

Shares in Tencent Holdings took a dive on Monday, January 6, after the company was placed on a list by the U.S. Department of Defense that alleged it worked with China’s military.

The Chinese tech giant has claimed its addition to the list was a mistake and refuted claims that it is in any way a “military company or military supplier.”

Tencent Added to Military List

Tencent, a Chinese multinational technology company, saw its shares  fall 7.1% yesterday after the Department of Defense released its “Chinese military companies” list.

The list, which is annually updated under U.S. law, alleged that 134 Chinese firms, including Tencent, Huawei Technologies, and Yangtze Memory Technologies, were working to aid their national military, Reuters reported .

According to the National Defense Authorization Act, those added to the list may be subject to goods or services bans in the U.S., although this is not always the case.

In the updated list, the U.S. removed six companies it claimed no longer met the requirements. These included AI firm Beijing Megvii Technology, China Railway Construction, and China Telecommunications.

Tencent Claims Mistake

Tencent has quickly fired back against its inclusion in the list, claiming that the Pentagon had made a mistake.

“Tencent being on this list is a mistake, and we are neither a military company nor a military supplier,” the tech giant told  Chinese publication Yicai.

“We will still work with the relevant US authorities to resolve the misunderstanding,” it added.

Although being included on the list does not involve straight-up bans, Tencent’s shares dropping on Monday is proof that the list has an immediate effect on a company’s reputation.

It also deters other U.S. firms from entering into business with labeled companies on the list.

U.S. vs. China

The annual list is just one of the many deterrents the U.S. has implemented over the last few years to limit and restrict Chinese tech.

U.S. lawmakers, who say that stringent export restrictions and sanctions are to protect national security, have been placing pressure on the Pentagon to add certain companies to the list.

The sanctions target China’s access to advanced technologies, including cutting-edge semiconductors and the equipment used to produce them.

By restricting the export of key technologies and blacklisting Chinese firms, the U.S. aims to stifle China’s ability to develop critical innovations.

These measures are part of a broader effort to curb Beijing’s rise as a technological superpower and to secure U.S. dominance in key sectors such as semiconductors and AI.