US Govt. Labels Tencent a Military-Linked Entity

Pentagon List Includes Tencent, Impacting Stock Value

Tencent, a leading Chinese technology firm, has been added to the US Department of Defense's list of companies with ties to the Chinese military (PLA). This designation, stemming from a 2020 executive order by former President Trump, restricts US investment in these entities. The order mandates divestment from any company deemed to support PLA modernization through technology, expertise, or research.

The DOD's updated list, released January 7th, now includes Tencent. The company swiftly responded via a spokesperson, stating to Bloomberg that it is "not a military company or supplier" and that the listing doesn't affect its operations. However, Tencent intends to collaborate with the DOD to clarify any misconceptions.

This designation has had a noticeable impact. Tencent's stock experienced a 6% drop on January 6th, with ongoing downward trends attributed to its inclusion on the list. This is significant given Tencent's global standing as the world's largest video game company by investment and a major player in the broader tech sector. The potential loss of US investment presents substantial financial consequences.

Tencent's gaming division, Tencent Games, operates as a publisher and investor. Its portfolio includes significant stakes in prominent studios such as Epic Games, Riot Games, Techland (Dying Light), Don't Nod (Life is Strange), Remedy Entertainment, and FromSoftware. Tencent Games has also invested in numerous other developers and related businesses, including Discord. The company's massive market capitalization, dwarfing competitors like Sony, underscores the potential ramifications of its presence on the DOD's list.