The Pentagon has quietly expanded its list of Chinese companies it believes are helping the Chinese military, and this time, some of the biggest names in tech are on it. Alibaba Group (Alibaba (BABA)), Baidu Inc. (Baidu (BIDU)), and BYD (BYD (BYDDY)) were added to the Defense Department's “1260H list” on Monday, joining a roster of firms the U.S. says are tied to China's defense sector.

The list itself doesn't trigger immediate sanctions, but it does come with real consequences. Starting later this month, the Pentagon will be barred from signing direct contracts with these companies. And by June 2027, the Defense Department won't be allowed to buy their products or services through third parties either. That's a big deal for companies like BYD, which makes everything from electric vehicles to batteries, and Alibaba, whose cloud computing arm could be a target for U.S. government contracts.

The Pentagon's notice says the companies are believed to be linked to China's State-owned Assets Supervision and Administration Commission and the Ministry of Industry and Information Technology, making them part of China's defense industrial base. Other notable additions include biotech firm WuXi AppTec, lidar makers RoboSense Technology and Hesai, humanoid robot company Unitree, battery producers CALB and EVE Energy, and display-panel giant BOE Technology Group.

This isn't the first time the Pentagon has tried to expand this list. Back in February, it briefly published an updated version but pulled it without explanation. The new version largely matches that earlier update, and it restores Chinese memory chipmakers CXMT and YMTC, which had been left off the withdrawn list. Alibaba, Baidu, and WuXi AppTec have already pushed back, saying they'll challenge their inclusion and seek removal, according to CNBC.

The timing is interesting. This move comes just after President Donald Trump and Chinese President Xi Jinping agreed to a trade truce during Trump's visit to Beijing, launching new bilateral trade and investment boards. So even as the two countries try to smooth over economic tensions, the Pentagon is tightening screws on Chinese tech. It's a reminder that national security concerns aren't going away, no matter how friendly the trade talks get.

Meanwhile, China is also tightening its own rules. Reports earlier this month said Chinese regulators have cracked down on citizens investing in U.S. stocks, requiring all overseas purchases to go through approved channels. The move comes as interest in U.S. tech shares heats up ahead of planned IPOs from SpaceX and Anthropic. China's securities regulator fined three firms for helping investors bypass regulations, and Hong Kong authorities are investigating 12 more. Affected investors can only sell existing holdings and withdraw funds over the next two years—no new purchases allowed.

So while the Pentagon's list is about keeping Chinese tech out of U.S. defense, China's moves are about keeping capital at home. Two sides of the same coin, really.