- A White House memo reviewed by the Financial Times alleges Alibaba Group is assisting the Chinese military with targeting capabilities.
- US lawmakers are urging the SEC to delist Alibaba and two dozen other Chinese firms from American exchanges, citing national security threats.
- The allegations intensify scrutiny on Alibaba's cloud division, which has been previously investigated by US authorities and monitored by Belgian intelligence.
A recently surfaced White House memo alleges that Chinese e-commerce and technology giant Alibaba Group is providing assistance to the Chinese military for targeting operations, according to a Financial Times report. The document reportedly details concerns about Alibaba's role in data processing and artificial intelligence development as part of China's military-civil fusion strategy.
The memo has prompted immediate action from US lawmakers, who are now calling on the Securities and Exchange Commission to delist Alibaba along with 24 other Chinese companies from US stock exchanges. The lawmakers argue these firms present unacceptable national security risks while benefiting from American capital markets.
Efforts to reach Alibaba for comment were unsuccessful Thursday evening. The company's cloud division has previously faced scrutiny from US authorities, and Belgian intelligence services have monitored its operations over espionage concerns, according to people familiar with the matter.
The political response appears to be gaining bipartisan traction amid escalating US-China tensions. Congressional leaders have warned that Chinese tech platforms like Alibaba could potentially access sensitive data through their cloud services and other operations. One staffer familiar with the deliberations described the situation as "reaching a tipping point" after years of mounting concerns about Chinese technology companies' ties to Beijing.
Without access to US capital markets, Alibaba would face significant constraints on its international expansion and ability to raise funds. American investors currently hold approximately one-third of Alibaba's shares, creating substantial exposure for US portfolios if delisting proceeds.
The White House memo represents the latest escalation in the technological decoupling between Washington and Beijing. Previous administrations have grappled with how to address the national security risks posed by Chinese tech giants while avoiding massive market disruptions. This latest development suggests the Biden administration is taking a more aggressive stance, according to analysts tracking the situation.
Market reaction was immediate in Asian trading hours, with Alibaba's Hong Kong-listed shares falling sharply amid the reports. The allegations come as Alibaba has been restructuring its business, including spinning off its cloud unit, amid regulatory pressure both in China and internationally.
Correction: An earlier version of this article misstated the number of Chinese companies lawmakers are seeking to delist. The correct figure is 25 companies, including Alibaba.