The US Department of Defense has designated Tencent, a major Chinese tech giant, to its list of Chinese military companies. While this designation doesn't immediately impose sanctions, it could create challenges for Tencent's business dealings in the United States. The designations were originally from President-elect Donald Trump's executive order in 2020, which prevented US companies from investing in entities with ties to the Chinese military.
Tencent has a massive presence in the gaming world, owning Riot Games (League of Legends) and holding substantial investments in companies like Epic Games (Fortnite), Ubisoft, Larian Studios (Baldur's Gate 3), and FromSoftware (Elden Ring). This new classification could complicate Tencent's future investments and partnerships in the US gaming industry. Chinese battery maker CATL was also added to the list. According to a Bloomberg report, both Tencent and CATL have denied the allegation and stated that the designation was a mistake. Chinese phone manufacturer Xiaomi was initially added to the same list in 2021 and then removed from it a few months later. Despite the designation, the companies are not impacted by the designation Tencent's New Head of Global Policy, Danny Marti, said to The Verge that the designation has no impact to their business however, both of these companies will be pushing to remove their names from the Department of Defense's list.