The US Department of Defense has taken a bold step by labeling Tencent, a prominent player in the gaming industry, as a Chinese military company. This move, which also includes battery manufacturer CATL, raises questions about the future business operations of these companies in the United States.
According to a report by Bloomberg, Tencent’s inclusion on the list doesn’t bring immediate legal ramifications like sanctions, but it casts a shadow over its dealings within the US. Tencent, the parent company of Riot Games and a major stakeholder in Epic Games, Larian Studios, and FromSoftware, finds itself in a precarious position. Additionally, reports suggest that Tencent is in talks to expand its investments in companies such as Ubisoft.
In response to the designation, Tencent has pushed back, describing the move as “clearly a mistake.” Both Tencent and CATL have expressed their intention to lobby for removal from the list. A similar scenario unfolded in 2021 when Chinese phone manufacturer Xiaomi was added to the same list, only to be removed a few months later.
Danny Marti from Tencent conveyed to The Verge that the designation “has no impact on our business,” but affirmed the company’s commitment to correcting the classification. The designation stems from the US government’s concern over Military Civil Fusion (MCF), a strategy it alleges the Chinese government employs to leverage civilian research for military advancements. Companies like Tencent and Xiaomi have denied any involvement in such practices.
The Department of Defense’s actions underscore the ongoing tension between the US and China over the intersection of technology and national security, leaving companies like Tencent navigating a complex geopolitical landscape.
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