U.S. Delays Blacklisting DeepSeek And Dozens Of Chinese Tech Firms

The United States has delayed adding Chinese artificial intelligence startup DeepSeek, memory chipmaker CXMT and more than 100 other companies identified as potential national security risks to a key trade blacklist, according to sources familiar with the matter. The move comes as the Trump administration seeks to avoid further escalating tensions with Beijing amid an already strained relationship over technology, trade and security.

DeepSeek, CXMT and numerous other firms were approved by an interagency committee last year for inclusion on the Commerce Department’s Entity List. However, the additions have yet to be formally published, despite approval. Reuters has also learned that more than 100 companies remain in the queue for potential listing.

The delay highlights the growing challenge facing U.S. policymakers as they attempt to balance national security concerns with broader diplomatic and economic objectives involving China.

DeepSeek And CXMT Face Security Scrutiny

DeepSeek attracted global attention in January 2025 after unveiling a low-cost artificial intelligence model that disrupted assumptions about AI development costs. However, U.S. officials have raised concerns about the company’s activities.

A senior State Department official previously alleged that DeepSeek supported Chinese military and intelligence operations and attempted to access advanced American chips through Southeast Asian shell companies.

In addition, AI companies have accused Chinese laboratories of attempting to extract capabilities from leading U.S. models. Earlier this year, Anthropic said it detected efforts by DeepSeek and other Chinese AI developers to obtain knowledge from its Claude platform. OpenAI also warned U.S. lawmakers that DeepSeek had targeted its models.

Meanwhile, ChangXin Memory Technologies (CXMT), China’s leading memory chip producer, has faced increasing scrutiny from Washington. The company was previously designated as a Chinese military company by the U.S. Defense Department, and discussions about placing it on the Entity List have been ongoing for more than a year.

Entity List Additions Remain Frozen

The Entity List restricts companies’ access to U.S. goods, software and technology. American exporters must obtain government licences before supplying listed entities, and approval is often denied.

Despite ongoing concerns, the Commerce Department has not announced any new Entity List additions since October. According to analysts, this marks the longest gap between updates in more than a decade.

Critics argue that the lack of action could allow sensitive American technology to continue reaching organisations viewed as strategic competitors. Some former officials contend that trade policy considerations have begun to outweigh national security enforcement.

Sources familiar with the process said an interagency committee involving the Commerce, Defense, Energy and State departments has approved multiple companies for listing. However, the Commerce Department has not yet published those decisions.

Wider Concerns Over Technology Exports

Several Chinese companies allegedly linked to Russian drone supply chains were among those selected for potential blacklisting. According to sources, some of those firms supplied components used in drones recovered in Poland last year.

Furthermore, dozens of Chinese businesses were reportedly identified as national security concerns for supplying restricted Nvidia chips to Chinese universities. Other companies involved in drone production and robotic systems for military use were also considered for inclusion.

At least 75 Chinese entities connected to advanced semiconductor manufacturing, chipmaking equipment and artificial intelligence development have reportedly completed the approval process for potential listing.

U.S.-China Technology Rivalry Intensifies

The delay comes against the backdrop of a broader competition between Washington and Beijing over advanced technologies. The United States has relied heavily on tariffs and export controls to limit China’s access to critical technologies, while China continues to maintain significant influence over the supply of rare earth minerals essential to defence, automotive and semiconductor industries.

At the same time, concerns have emerged about enforcement gaps within the Bureau of Industry and Security. Last year, officials indicated they would replace regulations governing global access to U.S.-origin AI chips. However, a replacement framework has yet to be introduced, and the previous system is no longer being enforced, potentially creating opportunities for sensitive technology to reach Chinese companies through overseas channels.

China’s foreign ministry has criticised U.S. export control measures, accusing Washington of politicising trade and technology issues and using national security concerns to suppress Chinese enterprises.

With inputs from Reuters