The United States has quietly held off on blacklisting China’s artificial intelligence startup DeepSeek, Chinese memory chipmaker CXMT, and more than 100 other companies that have been flagged as national security threats — and the Trump administration’s reluctance to act appears tied to efforts to keep relations with Beijing from deteriorating further, according to two people with knowledge of the situation.
All of these companies were approved by a government interagency committee last year for addition to the Commerce Department’s Entity List — a trade blacklist that restricts U.S. companies from shipping goods, software, and technology to listed firms without a special license that is almost certain to be denied. Reuters is reporting both the delay and the large number of companies waiting to be added for the first time.
DeepSeek made global headlines in January 2025 when its low-cost AI model rattled the technology industry. A senior official at the U.S. State Department told Reuters last year that the startup has provided support to China’s military and intelligence operations, and that it attempted to use shell companies in Southeast Asia to illegally obtain advanced American chips.
AI company Anthropic this year said it uncovered a coordinated effort by DeepSeek and two other Chinese AI laboratories to improperly extract capabilities from its Claude AI platform in order to boost their own systems. Meanwhile, OpenAI separately warned members of Congress that DeepSeek had also been targeting its models.
CXMT — formally known as ChangXin Memory Technologies — is China’s leading memory chip producer and was previously designated as a Chinese military company by the Defense Department during the Biden administration. The Commerce Department had reportedly been weighing placing it on the Entity List for over a year.
Despite repeated inquiries, DeepSeek and CXMT were not reachable for comment outside of normal business hours. The Commerce Department’s Bureau of Industry and Security, which manages the Entity List, did not directly address questions about why the list has gone without updates since last year, nor did it comment specifically on DeepSeek or CXMT.
In a statement, the bureau said it uses “many policy and enforcement tools, including the Entity List … on a daily basis to ensure we are combating bad actors.”
The U.S. and China are engaged in an intensifying rivalry spanning technology, trade, and national security. Washington has relied on tariffs and export controls to limit Beijing’s technological rise, while China has leveraged its control over rare earth minerals that are critical to defense, automotive, and semiconductor industries.
According to Philip Luck, a global supply chain researcher at the Washington-based Center for Strategic and International Studies, no companies have been added to the Entity List since October — the longest gap in new postings in more than ten years.
“The Entity List is like whack-a-mole and you’ve got to keep whacking the moles,” Luck said, likening the situation to an arcade game. He added that the absence of new listings is likely enabling American technology to reach adversaries who could weaponize it against the United States.
Kevin Kurland, a former Commerce Department official, put it bluntly: “The fact the U.S. hasn’t put any companies on the Entity List since October demonstrates that trade policy is overshadowing the use of a critical national security tool.”
Among the companies waiting to be listed are several Chinese firms that reportedly supplied Russian drones recovered in Poland last September. One source noted that listing those lesser-known companies is especially important because American suppliers may be unaware of what those businesses actually do.
Dozens of additional Chinese companies were identified last year as security risks after they were found to be selling restricted Nvidia chips to Chinese universities, but they too were never added to the list, according to a third source. Chinese manufacturers of military drones and robot dogs were also among the candidates for blacklisting, that same source said.
Since late 2025, the under secretary of commerce for industry and security, Jeffrey Kessler, has reportedly sought to avoid placing Chinese parties on the list out of concern it would further strain U.S.-China relations, according to the first source and others familiar with the situation.
The standstill is being viewed by many as symptomatic of a broader dysfunction at the Bureau of Industry and Security under the current administration — a difficulty taking action or issuing new rules to counter threats that export restrictions could otherwise address. The bureau announced early last year that it would replace a Biden-era regulation governing global access to American AI chips, but no replacement rule has been published, and the original rule is not being enforced, potentially creating a loophole that may have allowed those chips to reach Chinese companies operating outside China.
Decisions on who gets added to the Entity List are made by an interagency committee that includes representatives from the Commerce, Defense, Energy, and State departments, and sometimes Treasury. But two sources said that even after the committee approved companies for the list, the Commerce Department has not moved forward with publishing them.
At least 75 Chinese entities involved in advanced semiconductor production, semiconductor manufacturing equipment, and AI development have cleared the committee process and were slated for blacklisting, one source said.
