The US Department of Defense has classified Tencent, a major investor in several big video game companies, as a Chinese military company.
The report from Bloomberg states that Tencent alongside battery maker CATL have been added to a list that classifies them as Chinese military companies. The designation itself does not carry any legal consequences such as sanctions, but inclusion on the list is not ideal for companies looking to conduct business in the United States.
As a result, while there is no immediate impact to what this designation means for Tencent, this is still a company that owns Riot Games, and has heavy investments in a variety of other game companies including Epic Games, Larian Studios, and FromSoftware. There are also reports that say Tencent is in negotiations with investing more into companies like Ubisoft.
Tencent has told Bloomberg that this designation is “clearly a mistake” and both Tencent and CATL will be pushing to remove their names from the Department of Defense’s list. Previously, Chinese phone manufacturer Xiaomi was added to the same list in 2021 and then removed from it a few months later.
In a statement to The Verge, Tencent’s Danny Marti says that the designation “has no impact on our business” but will still be working to remove themselves from the classification.
In a one pager published by the Department of Defense, the US government cites Military Civil Fusion, or MCF, a startegy it says the Chinese government uses to combine civilian research and commercial success to further advance its military, hence why the US government has a list of Chinese companies it suspects as working with the Chinese military, something companies like Tencent and Xiaomi deny.
Matt Kim is IGN’s Senior Features Editor. You can reach him @lawoftd.
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