Chinese conglomerate Tencent Holdings has been designated by the U.S. Department of Defense (DoD) as a “Chinese military company.” The notice of this new designation by the Pentagon was published in the Federal Register on Tuesday (PDF), making it official. This designation does not come with any sanctions or bans but it puts Tencent—and its various subsidiaries—in a tough position where it might come under scrutiny when conducting business in the United States. Being added to the list doesn’t mean that Tencent will remain there forever either—the company could lobby the government to change its mind on the designation.
Tencent owns the popular Chinese language multi-purpose messaging app WeChat and is also the owner of Riot Games—the makers of League of Legends, TeamFight Tactics, and Valorant. In addition to owning Riot, Tencent runs various entertainment operations in California and has minor investments in other U.S.-based game companies such as Epic Games, Activision Blizzard, and many others.
As The Esports Advocate has noted in past reporting, the U.S. government’s adversarial relationship with the Chinese government is likely to lead to some actions against game companies that have close ties to Chinese companies, though in the case of its ongoing war against short form video platform TikTok, the U.S. government has (at least in the past) failed to prove a definitive link between the platform and the Chinese government in the federal courts.