U.S. has so far refrained from placing Chinese AI firm DeepSeek, memory chip manufacturer CXMT, and more than 100 other entities identified as potential national security concerns on its trade blacklist, according to two sources familiar with the matter. The move comes as the Trump administration seeks to prevent further deterioration in ties with Beijing.
DeepSeek, CXMT, and the other firms had reportedly been cleared last year by an interagency review panel for inclusion on the U.S. Commerce Department’s Entity List. The approval process and the existence of more than 100 companies still awaiting formal addition to the blacklist are being reported publicly for the first time, according to Reuters.
DeepSeek, whose low-cost AI model disrupted the tech industry in early 2025, has been accused by U.S. officials of supporting Chinese military and intelligence activities and attempting to access advanced U.S. chips through Southeast Asian shell companies. AI firms Anthropic and OpenAI have also alleged that DeepSeek sought to extract capabilities from their models to enhance its own systems.
CXMT, China’s leading memory chipmaker, was previously designated a Chinese military company by the U.S. Defense Department and has long been considered for inclusion on the Entity List. Companies placed on the list face severe restrictions on access to U.S. goods, software and technology.
Tense Rivalry
The United States and China are locked in a tense rivalry over technology, trade and national security, with Washington using tariffs and export controls to keep Beijing at bay while China maintains a stranglehold on rare earth minerals that defense, auto and chipmaking firms need.
The U.S. has not posted any additions to its Entity List since October, the longest stretch between new postings in more than a decade, said Philip Luck, who studies global supply chains at the Washington-based Center for Strategic and International Studies.
The lack of new listings is likely allowing American technology to reach adversaries who could use it against the U.S., he added.
Multiple Chinese companies were slated for the list for supplying Russian drones that were recovered in Poland last September, one of the people said. Listing those lesser-known companies is even more important to U.S. suppliers who may not know the nature of their business, the person said.
Why the Blacklist Expansion Has Stalled
Dozens of Chinese firms were reportedly flagged last year for supplying restricted Nvidia chips to Chinese universities, while drone and robotic systems manufacturers linked to the Chinese military were also identified as potential blacklist candidates. However, none were added to the U.S. Entity List.
According to sources, Commerce Department official Jeffrey Kessler has been reluctant to expand the blacklist since late 2025 to avoid worsening U.S.-China tensions. Critics say the slowdown reflects broader inaction at the Bureau of Industry and Security, which has yet to replace or enforce key AI chip export regulations.
Sources also said an interagency committee approved numerous Chinese firms for blacklisting, including at least 75 entities involved in advanced semiconductors, chipmaking equipment and AI development, but the Commerce Department has not formally published the listings.
(With inputs from Reuters)
