Alibaba is helping Chinese military to target U.S., White House memo claims: FT

BEIJING — Alibaba’s He is helping the Chinese military target the United States, according to a memo from the White House. Financial Times reported Friday.

According to the FT, the memo claims that “Alibaba provided technical support for Chinese military ‘operations’ against targets in the United States.”

The FT said it could not independently verify the allegations and had not published the full version of the memo. It was not clear when the note was published. While the White House did not respond to requests for comment, the FT said it stood by its reporting.

In a statement to CNBC regarding the FT’s report, Alibaba said, “The allegations and insinuations in the article are completely false.”

“We question the motivation behind the anonymous leak, which the FT admitted it could not verify,” Alibaba said. “This malicious PR operation clearly came from a fraudulent voice seeking to undermine President Trump’s latest trade deal with China.”

U.S. President Donald Trump and Chinese President Xi Jinping met in South Korea last month for the first time since Trump’s second inauguration in January. Leaders agreed to roll back tariffs and export controls for 12 months, easing bilateral tensions that have escalated this year.

Andy Rothman, founder of consulting firm Sinology, told CNBC’s “Squawk Box Asia” on Monday that the lack of details in the FT report “raises the question of whether some China hawks in the administration are trying to undermine the President’s deal with Xi Jinping.”

While he pointed out that Trump did not say anything about the FT report, he pointed out that all major US cloud computing companies have contracts with the US government.

The United States has stepped up efforts over the past few years to restrict China’s access to advanced semiconductors for training artificial intelligence models.

“In response to this, Alibaba’s stock price has fallen so rapidly. [to the FT report] “This shows how nervous China’s AI industry is in the face of possible new sanctions,” said Kyle Chan, a Brookings researcher who focuses on Chinese technology.

Alibaba shares closed 3.78 percent lower in the U.S. on Friday following the report, but rose more than 1 percent in Hong Kong on Monday.

Chan noted that the FT report comes at a time when Alibaba’s open-source Qwen AI model is growing in popularity in Silicon Valley, US AI companies OpenAI and Anthropic are increasing the threat to their pay-for-use models, and investors are increasingly worried about a possible AI bubble.

Alibaba will announce quarterly results on November 25, ahead of the opening of the US market.

—CNBC’s Eamon Javers and Elaine Yu contributed to this report.