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The US just added the world’s biggest games publisher Tencent to their list of Chinese military companiesTencent say it’s a mistake
Tencent say it’s a mistake
Image credit:Tencent
Image credit:Tencent
Chinese publisher Tencent are the biggest video game company in the world. Their wholly owned subsidiaries including League Of Legends developers Riot Games, Path Of Exile developers Grinding Gear Games, and UK outfit Sumo Group. They own shares in everything from Epic Games through Ubisoft toSilent Hill 2rebooters Bloober Team. Are you a game developer? Odds are that at least one percent of your body belongs to Tencent. Maybe one of your toes.
And now it turns out that Tencent are some kind of military operator, as well. Or at least, that’s what the US Department of Defence would have us believe: they’ve just somewhat randomly added the firm to an infamous list of Chinese military companies, together with lithium-ion battery maker CATL. This potentially makes it difficult for Tencent to do business in the States, but Tencent say that it’s all based on a “misunderstanding”.
Formally known asSection 1260H, the list is updated annually and currently runs to 134 companies, including phone manufacturer Huawei. Being on there doesn’t mean the companies in question are immediately banned from doing business with the USA, but it puts pressure on the US Treasury Department to sanction them. This might scare away investors: the BBCreportsthat Tencent has already seen a share price fall in Hong Kong as of today, Tuesday 7th January.
Tencent, naturally, say the whole thing is an error, and that the designation will have no material effect on their activities. “We are not a military company or supplier,” Tencent spokesperson Danny Marti commented to the BBC. “Unlike sanctions or export controls, this listing has no impact on our business. We will nonetheless work with the Department of Defense to address any misunderstanding.”
I’m no scholar of superpower geopolitics, but my understanding is that all this forms part of US efforts to contain China both economically, and in terms of the military applications and connections of Chinese tech companies and research organisations. Here’sa US Department of Defence press release from 2022which spells out the thinking. An excerpt:
Given the sheer scale of Tencent’s operations - they also work in generative AI and cloud computing and own WeChat, one of the largest social media networks - it seems probable that they have military connections somewhere. But then again, so do many large US tech companies, like Activision-Blizzard and Microsoft. Many are the links between the tech biz and the world’s armed forces.
All this comes amid news that Tencent areconsidering a buyout of Ubisoft with the aid of the founding Guillemot family. It also follows theresignation of two Tencent-appointed Epic Games directors, in response to a US Department of Justice investigation into potential antitrust violations.
