• Alibaba sues the U.S. government for being labeled a 'Chinese military company'
• The lawsuit argues the Pentagon's designation is arbitrary and lacks factual basis
• The blacklist could prevent Alibaba from securing U.S. government contracts

The e-commerce giant Alibaba has filed a lawsuit against the U.S. Department of Defense, contesting its inclusion on a list designating it as a “Chinese military company.” According to Alibaba, the claims linking it to the Chinese military lack any basis in fact or law, and the company asserts that it is governed by an independent board without military affiliations. Alibaba's lawsuit was filed in a federal court in San Jose, California, on June 23, and seeks to have its name removed from a list created by the Pentagon that has risen to include 188 companies as of June 8, 2026, including BYD and Baidu, which the U.S. government claims support the People’s Liberation Army operations.

In its filing, Alibaba criticized the Pentagon's reasoning, arguing that its inclusion on the blacklist is a result of the company’s compliance with Chinese technology regulations rather than any direct military ties. The lawsuit emphasizes that Alibaba’s services are focused on retail and logistics and are not intended for military applications. “The determinations have no basis in fact or law,” the company stated, highlighting that none of its board members have military affiliations and asserting its commitment to following regulations applicable to all foreign businesses operating in China.

Alibaba's designation as a military company imposes severe restrictions on its operations, preventing the Pentagon and any associated U.S. contractors from doing business with it. Starting June 30, the firm could be legally barred from accessing crucial government contracts, which are vital for U.S. technology companies. This designation not only impacts Alibaba but may also deter other American businesses from engaging with it, as they may sever ties to protect their dealings with the Department of Defense. Alibaba described the situation as creating a functional blockade, severely restricting its operational capabilities in the U.S.