The Section 1260H list is an annually updated roster, published by the U.S. Department of Defense, of companies the Pentagon believes are linked to China’s military or its “military-civil fusion” program. Despite being widely called a blacklist, it does not ban American companies from doing business with the firms on it — it only stops the Pentagon itself from buying their goods and services. That narrow scope is why OpenAI and Google could still legally supply AI services to Singapore-based units of 1260H-listed Chinese groups, even as the designation sat on those groups’ corporate record.
Where the list comes from
The list takes its name from Section 1260H of the National Defense Authorization Act for Fiscal Year 2021, a law that directed the Secretary of Defense to identify “Chinese military companies” operating in the United States and publish an updated list every year through at least 2030. The Pentagon released its most recent expansion in June 2026, adding 65 entities — 17 new parent companies and 48 of their subsidiaries — spanning artificial intelligence, automotive manufacturing, consumer electronics, e-commerce, batteries, and semiconductors.
What counts as a “Chinese military company”
The Pentagon can add a firm to the list if it does business in the United States and has meaningful ties to the People’s Liberation Army, China’s Central Military Commission, or state bodies like the State-owned Assets Supervision and Administration Commission — or if it otherwise contributes to China’s strategy of blending civilian and military industry, known as military-civil fusion. A company doesn’t need to make weapons to qualify; ownership structure and state affiliation are often enough.
What being listed actually bans
A 1260H designation carries one hard legal consequence: since June 30, 2026, the Department of Defense itself is barred from procuring goods, services, or technology from listed entities, a restriction that extends down their supply chains. The designation also blocks the Pentagon from contracting with firms that employ lobbyists representing a listed company. What it does not do is restrict private American companies from selling to, buying from, or partnering with a listed firm — that is the job of a separate system, export controls run by the Commerce Department, such as the Entity List. Analysts sum up the difference as “we won’t buy” (1260H) versus “you can’t sell” (Entity List export licensing).
Why AI sales kept flowing
That distinction is exactly what let OpenAI and Google keep serving customers linked to 1260H-listed groups. A Financial Times investigation, published July 10, 2026, found that both companies had supplied advanced AI services to Singapore-based subsidiaries of Alibaba, Baidu, and Tencent — all parent groups on the Pentagon’s list — because U.S. rules tightly restrict semiconductor exports to China but impose far fewer controls on AI cloud services accessed from outside mainland China. OpenAI said it blocks direct access to its models from mainland China but permits Chinese-owned businesses to use its services in jurisdictions like Singapore where usage safeguards can be enforced; it separately cut off Alibaba-linked accounts it accused of harvesting outputs to train a rival model, a distinct issue from the 1260H question. Google said its products remain available in Singapore and Hong Kong under its usage policies, while acknowledging that geography-based restrictions alone can’t stop a determined user from routing around them. Anthropic has taken the strictest position among major AI labs, barring Chinese companies and foreign entities they own from its frontier models outright and lobbying for broader U.S. export controls on AI.
A 1260H listing does carry indirect weight: Commerce Department officials have said an entity’s appearance on the list is a “red flag” that can trigger extra export-license scrutiny, and being named can also spook investors or push some companies toward broader sanctions later. But on its own, it is a federal procurement rule, not an export ban — which is the gap OpenAI’s and Google’s Singapore-routed sales sat in.
In the news
This explainer accompanies our report on OpenAI and Google supplying AI to Pentagon-blacklisted Chinese firms through Singapore units, and connects to our broader explainer on AI export controls.
FAQ
Is the 1260H list the same as a sanctions list? No. Sanctions, issued by the Treasury Department’s OFAC, can freeze assets and bar transactions outright. A 1260H listing is a DoD procurement restriction; it can sometimes lead to later sanctions action, but it isn’t one itself.
Does the 1260H list stop a listed company from buying U.S. chips or software? Not by itself. Chip and advanced-technology exports to China are separately restricted through Commerce Department export controls, which are far stricter than the 1260H list’s Pentagon-only purchasing ban.
Who is currently on the list? The Pentagon publishes the full roster annually; as of the June 2026 update it named dozens of parent companies and subsidiaries, including groups affiliated with Alibaba, Baidu, and Tencent, alongside firms in chipmaking, robotics, and energy storage.
Why would a company end up on the list without making weapons? Designation turns on ownership and state affiliation — ties to the PLA, China’s Central Military Commission, or state asset regulators — not on whether the company’s products are themselves military hardware.