Key facts
- The U.S. has delayed adding Chinese AI startup DeepSeek and memory chipmaker CXMT to a trade blacklist.
- Over 100 other companies flagged as national security risks are also awaiting placement on the list.
- DeepSeek is accused of supporting Chinese military and intelligence operations and attempting to illegally access U.S. chips.
- CXMT was previously designated a Chinese military company by the Defense Department.
- No new companies have been added to the Commerce Department's Entity List since October, the longest period in over a decade.
The U.S. has refrained from adding China's AI startup DeepSeek, memory chipmaker CXMT, and over 100 other companies flagged as national security risks to a trade blacklist, according to sources familiar with the matter. This decision comes as the Trump administration aims to avoid escalating tensions with Beijing.
DeepSeek and CXMT, along with more than 100 other firms, were approved by an interagency committee last year for inclusion on the Commerce Department's Entity List. This list restricts U.S. companies from shipping goods, software, and technology to listed entities without a license, which is typically denied.
DeepSeek has been accused by a senior U.S. State Department official of supporting China's military and intelligence operations and attempting to illegally access advanced U.S. chips using shell companies. Furthermore, Anthropic and OpenAI have reported that DeepSeek and other Chinese AI labs have targeted their platforms to illicitly extract capabilities and improve their own models.
CXMT, identified as China's top memory chipmaker, was previously designated a Chinese military company by the Defense Department under the Biden administration. Commerce had considered placing it on the Entity List over a year ago.
The U.S. has not added any new companies to its Entity List since October, marking the longest interval between postings in over a decade. Experts suggest this inaction allows American technology to reach adversaries and indicates that trade policy may be overshadowing national security concerns.
Some companies slated for the list were identified for supplying Russian drones, while others were flagged for selling restricted Nvidia chips to Chinese universities. Additionally, Chinese companies involved in manufacturing drones and robot dogs for the country's military were also considered potential targets.
Sources indicate that officials, including Under Secretary of Commerce for Industry and Security Jeffrey Kessler, have sought to avoid listing Chinese parties due to concerns about escalating U.S.-China tensions. The interagency committee, comprising officials from Commerce, Defense, Energy, and sometimes Treasury, has approved companies for the list, but the Commerce Department has not published these additions. At least 75 Chinese entities involved in advanced semiconductor production, manufacturing equipment, and AI modeling were approved for blacklisting.