White House Memo Signals U.S. Alarm Over Alibaba’s Tech Links to PLA
A leaked national security memo alleges Alibaba provided technical support to the Chinese military against U.S. targets, prompting market reactions and denials.
A national security memo from the White House alleges that Alibaba provided technological support to the Chinese military for operations targeting the United States. The claims, reported by the Financial Times, have sparked a share price drop and prompt denials from Alibaba and Chinese officials.
What We Know
According to the memo cited by the Financial Times, Alibaba is accused of offering technological aid to the People’s Liberation Army, including access to customer data—such as IP addresses, Wi‑Fi network information and payment records—and AI‑related services. The memo also claims employees transferred knowledge of zero‑day software vulnerabilities to the PLA.
The Financial Times was unable to independently verify the claims. Alibaba responded by calling the allegations “complete nonsense,” characterizing them as an attempt to manipulate public opinion and malign the company. The Chinese Foreign Ministry and embassy also denounced the report, stating Beijing would never force companies to break local laws or gather foreign data.
Markets reacted swiftly: Alibaba shares fell around 3–4% following the report. Analysts at Citi described the memo as a near-term overhang but reiterated a Buy rating and a US$218 price target.
What It Means
The memo underscores growing U.S. concern over Chinese tech firms’ national security implications. Allegations that Alibaba might share sensitive data and novel cyber capabilities with the PLA amplify scrutiny of Chinese tech platforms operating globally. The lack of verifiable details—what systems were targeted, the nature of the support, or whether the operations are ongoing—leaves the memorandum’s impact rooted in allegation rather than fact.
The market response reflects investor caution toward geopolitical risk, particularly tied to U.S.–China tech tensions. While analysts view the fall in share price as a buying opportunity, the episode may signal elevated regulatory and reputational risks ahead.
The Backstory
U.S. concerns about Chinese firms’ ties to military authorities are longstanding, rooted in the national “military‑civil fusion” strategy. Past congressional efforts have sought to delist Chinese ADRs, including Alibaba, over security and disclosure worries. This memo deepens those anxieties.
What’s Next
The administration faces pressure to clarify or otherwise act on the memo’s claims. Congressional leaders have historically called for delisting or sanctions; renewed urgency may follow ⎯ though any move would depend on validation of the memo’s content. Alibaba could also face increased scrutiny by regulators in the U.S. and its access to global markets may come under review.
