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Alibaba's stock is down because the US government is about to add it to a Pentagon blacklist.
This blacklist flags Chinese companies the Pentagon believes are helping China's military.
It's officially called the Section 1260H list.
The Pentagon has been reviewing Alibaba for months.
Reports say the formal addition could happen as soon as today.
Being placed on this list doesn't mean Alibaba is banned from the US.
It also doesn't directly impose sanctions.
Think of it more like a giant government warning label on the company.
It tells American businesses and investors that Alibaba may have ties to China's military.
Alibaba has denied the claims, saying there is no basis for the designation.
What makes this bigger is that Alibaba isn't just an online shopping company.
It's one of China's leading artificial intelligence developers.
Its cloud division has been aggressively expanding into AI.
Its Qwen AI models now rival some of the best Western competitors.
AI is what's known as a dual use technology.
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