Pentagon released an updated list of firms tied to the Chinese military, adding e‑commerce giant Alibaba and internet services provider Baidu. The list does not trigger sanctions, but the DoD can no longer contract directly with those firms or use their products through intermediaries, potentially cutting off revenue from U.S. defense contracts for future procurement cycles and budgeting.

The revised roster follows a February release that was withdrawn before President Trump's May visit to Beijing, signaling that diplomatic overtures have not softened U.S. security concerns. Alongside Alibaba and Baidu, the list now flags Chinese memory‑chip makers CXMT and YMTC, underscoring worries about advanced semiconductor supply chains for both civilian and military applications.

Senate Republicans and Democrats are now urging the administration to tighten export controls on chip manufacturers, demanding that subsidiaries of Chinese firms be barred from ordering custom silicon from contract fabs such as TSMC. The bipartisan push reflects growing alarm that Chinese AI hardware could be diverted into defense projects despite existing restrictions now currently.

Taiwan is reportedly considering legislation mirroring U.S. measures, which would ban sales of high‑performance AI chips to any Chinese customer, not just those on the Pentagon’s blacklist. If enacted, the rule could choke off a key export market for Taiwanese fabs, tightening the global AI supply chain and reinforcing Washington’s broader tech‑decoupling strategy today globally.