Tencent Responds to Military Allegations
Tencent, a major Chinese tech company known for owning Riot Games, the developer of ‘League of Legends,’ has been added to a U.S. government list of businesses suspected of having ties to the Chinese military. This list, compiled by the Pentagon, serves as a caution to U.S. companies about potential risks when engaging with these entities.
In response, Tencent firmly stated, ‘We are not a military company or supplier.’ The company plans to discuss the matter with the U.S. Department of Defense to clear up any misunderstandings. If these talks don’t lead to their removal from the list, Tencent is considering legal action to protect its interests.
The inclusion on this list doesn’t immediately impose sanctions but signals possible future restrictions. Following the announcement, Tencent’s stock dropped by up to 7%, reflecting investor concerns. This development is part of ongoing tensions between the U.S. and China, especially in the tech industry.
Other companies, like CATL, a leading electric vehicle battery maker, have also been added to the list and have denied any military connections. Both Tencent and CATL are exploring legal avenues to challenge their inclusion. There’s a precedent for such actions; for instance, Xiaomi was removed from the list in 2021 after legal proceedings.
Tencent’s extensive reach in the tech world, including stakes in companies like Epic Games and Activision Blizzard, makes this situation particularly noteworthy. The company’s flagship messaging platform, WeChat, boasts nearly 1.4 billion monthly active users worldwide.
Previously, in 2020, the U.S. attempted to ban WeChat over security concerns, but a federal judge blocked the order, citing constitutional violations.
The U.S. government’s move to list Tencent and others is seen as an escalation in the tech rivalry between the two nations. It raises the possibility of these companies facing more severe restrictions, such as being added to the Entity List, which would limit their access to U.S. technology.
Analysts believe Tencent has a strong case for removal from the list, given the lack of clear evidence linking it to the Chinese military.
As this situation unfolds, Tencent’s efforts to clear its name will be closely watched, considering its significant role in the global tech industry and the potential implications for U.S.-China relations.
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