Alibaba Loses Five Lobbying Firms, Tencent Loses Four as New U.S. Law Takes Effect
Miles Bennett
A new U.S. rule effective Tuesday forces lobbying firms to choose between Chinese clients and Pentagon contracts — Alibaba has lost five and Tencent four lobbying representatives, systematically severing Chinese tech companies' policy-influence channels in Washington.
What does the new rule actually require?
The Pentagon will now be barred from working with any lobbying firm that also represents entities on the 1260H list — the Defense Department's roster of designated "Chinese military companies."
In plain terms = lobbying firms must pick one side — Chinese clients or U.S. defense business. They can no longer serve both.
This means → the commercial logic of Washington lobbying has been rewritten: defense contracts are far more lucrative than any single Chinese client, making the choice essentially one-directional.
Who left, and how fast?
Alibaba lost five firms: Brownstein Hyatt Farber Schreck, Mercury Public Affairs, MO Strategies, Sidley Austin, and Greenberg Traurig — most disclosed termination within a single week.
Tencent lost four. DJI, Hikvision, Innolight, and Unitree Robotics also lost lobbying representation before the rule took effect.
This reflects an industry-wide risk retreat, not isolated decisions — no firm is willing to bet its entire defense portfolio on one Chinese client.
Lobbying is cut — but legal representation stays?
The new rule restricts lobbying only, not legal representation. Sidley Austin dropped its lobbying work for Alibaba but still represents the company in its lawsuit filed last week against the Pentagon.
Alibaba itself acknowledged in court filings that the new lobbying restriction "has caused multiple firms and lobbyists to indicate they will end their relationships with Alibaba."
In plain terms = Alibaba can still hire lawyers to fight in court, but it has no one left to work the halls of Congress and the White House on its behalf.
Why is the 1260H list growing so powerful?
The list now covers 188 companies, up from just 20 under predecessor regulations a few years ago, spanning semiconductors, AI, robotics, and drones.
Kit Conklin, chief global affairs officer at Exiger, noted: "The 1260H list was previously under-watched because there were no direct compliance consequences. That has changed."
This means → the 1260H is evolving from a reference list into an enforcement tool with real compliance teeth, as Congress and the Trump administration increasingly use it as the foundation for China restrictions.
Why is Alibaba's position especially precarious?
This month Anthropic wrote to Congress and the White House alleging that Alibaba used thousands of fake accounts to mass-harvest outputs from its Claude AI model to build a competing chatbot cheaply, citing Alibaba's 1260H listing as evidence of a national-security threat.
Alibaba has not responded to the allegation. Meanwhile, the collapse of its lobbying channels leaves it with almost no one to speak for it in Washington.
This means → whether Alibaba's lawsuit can get it removed from the list is the next critical test — but without lobbying capability, its policy influence beyond the courtroom is near zero.
How is Beijing responding, and what comes next?
The June update to the 1260H list already triggered Chinese retaliation: Beijing imposed export controls on 10 U.S. companies, including two rare-earth producers working with the Trump administration.
Alibaba and Tencent have both denied ties to the Chinese military and declined to comment on the lobbying departures.
This reflects a new front in U.S.–China tech decoupling — the contest is expanding from trade and technology into the policy-influence layer itself, systematically closing Chinese companies' channels for making their voices heard in Washington.
Content is for reference only, not financial advice.