The US Department of Defense has classified Tencent, a major investor in several major video game companies, as a Chinese military company.
Report from Bloomberg states that Tencent, along with battery manufacturer CATL, has been added to a list that classifies them as Chinese military companies. The designation itself does not carry any legal consequences in the form of sanctions, but inclusion on the list is not an ideal solution for companies wishing to operate in the United States.
As a result, while there is no direct impact on what this designation means for Tencent, it is still a company that owns Riot Games and has made vast investments in a number of other gaming companies, including Epic Games, Larian Studios, and FromSoftware. There are also reports that Tencent is in negotiations to invest more in companies like Ubisoft.
Tencent told Bloomberg that the designation is a “clear error” and that both Tencent and CATL will insist that their names be removed from the Department of Defense list. Previously, Chinese phone maker Xiaomi was added to the same list in 2021 and then removed from it a few months later.
In a statement to Shoulder, Tencent’s Danny Marti says the nomination has “no impact on our business” but will continue to work to remove himself from the classification.
In a one-page Defense Department publication, the U.S. government cites its Military Civil Fusion, or MCF, strategy, which it says the Chinese government is using to combine civilian research with commercial success to further develop its military, which is why the U.S. government has a list of Chinese companies it suspects of cooperation with the Chinese army, which is denied by companies such as Tencent and Xiaomi.
Matt Kim is senior features editor at IGN. You can reach it @lawoftd.
