Nine US lawmakers have urged the Department of Defense (recently renamed the Department of War) to add 17 Chinese companies, including AI giant DeepSeek and smartphone maker Xiaomi , to the Section 1260H military-linked blacklist. The move aims to prevent US taxpayer funds from underwriting PRC military-industrial capabilities.
Business Impact
This signals a massive expansion of the “Great Decoupling.” Any firm on the 1260H list faces restricted access to US government contracts and intense scrutiny for private-sector partnerships. For global companies, this increases the complexity of managing an “untainted” technology supply chain, especially in AI and sensing hardware.
Why It Happened
The move is part of the “Military-Civil Fusion” strategy response, where US intelligence believes Chinese commercial tech firms are mandated to support PLA modernization. DeepSeek, in particular, is being targeted due to its rapid rise in the generative AI market.
Recommended Executive Action
Review your third-party vendor risk assessment. Organizations should audit their use of Chinese-origin AI models (like DeepSeek) or hardware in sensitive environments. Prepare a contingency plan for a scenario where these firms are sanctioned globally.
Hashtags: #Geopolitics #DeepSeek #Xiaomi #USChina #SupplyChain #1260H #AI #MilitaryTech #InfoSec