US puts hold on blacklisting Chinese firm DeepSeek as over 100 companies face security scrutiny.

The Commerce Department's Entity List imposes export restrictions on US goods and technology, with no updates since last October. This prolonged absence is unprecedented in over a decade.

The US government has temporarily delayed listing several Chinese entities on its trade blacklist, including AI startup DeepSeek and memory chipmaker CXMT, among over 100 companies deemed national security threats, sources close to the situation reveal.

An interagency committee cleared DeepSeek, CXMT, and others for inclusion in the Commerce Department's Entity List last year. For the first time, this development has come to light through reports. Over 100 companies are currently under scrutiny, with some awaiting their names to be published on the list.

A senior US State Department official revealed that DeepSeek, a company whose AI model caused a stir in January 2025, has ties to China's military and intelligence sectors. The firm attempted to utilize Southeast Asian shell companies to gain unauthorized access to high-end US chip technology.

In 2023, DeepSeek's activities have been scrutinized for allegedly exploiting Anthropic's Claude AI technology to enhance their own research, with the company joining a list of over 100 firms under security review by US authorities.

China's leading memory chip manufacturer, ChangXin Memory Technologies, has been identified as a Chinese military entity by the US Defense Department under President Biden's administration guidelines. This designation was first explored by the Commerce Department over 12 months prior to its official announcement.

US businesses are barred from exporting goods, software, and tech to firms listed unless they secure a license, which typically won't be granted.

Efforts to reach DeepSeek and CXMT for comment were unsuccessful due to business hours constraints. The Bureau of Industry and Security within the Commerce Department remained silent regarding the delay in updating the Entity List, which has been stagnant since last year, without providing insight into the status of DeepSeek or CXMT.

BIS employs a range of policy and enforcement tools, such as the Entity List, to combat malicious entities on an ongoing daily basis effectively.

A high-stakes standoff is unfolding between the US and China, where tech, trade, and national security are major flashpoints. The US employs tariffs and export restrictions to limit Chinese influence, but Beijing's grip on crucial rare earth minerals remains unbroken, vital for defense, automotive and semiconductor industries.

Since October, there's been an unprecedented lull in new additions to the U.S. Entity List, with no new entries made in over a year, according to Philip Luck of the Center for Strategic and International Studies' global supply chain research team.

Luck likened the Entity List to a challenging arcade game, requiring constant effort to stay ahead of emerging threats.

American tech may be falling into enemy hands due to a shortage of fresh exports, according to his warning.

According to Kevin Kurland, a former Commerce Department official, the absence of new additions to the Entity List since October suggests that current trade policies are taking precedence over the strategic deployment of this crucial national security mechanism.

Sources indicate several Chinese firms are being considered for inclusion on a list due to allegations they supplied Russian drones discovered in Poland last September. This move holds significant importance for US suppliers who often remain unaware of the true scope of their Chinese counterparts' operations.

Chinese firms were flagged as national security threats in 2022 for supplying Nvidia chips to educational institutions, yet only a select few made it onto the restricted list, according to an independent source.

Potential targets in the US-China business tension include Chinese firms manufacturing and exporting drones and robotic canine units for the Chinese military.

Jeffrey Kessler, under secretary of commerce for industry and security, has been cautious in his approach since 2025, aiming to sidestep potential escalations by excluding Chinese entities from restrictive lists, as confirmed by multiple sources close to the situation.

The scarcity of listings reveals a broader issue at the Bureau of Industry and Security under the Trump administration's second tenure: an apparent inability to take action or introduce new regulations to mitigate threats that can be minimized by controlling exports. Specifically, in early 2023, the bureau announced plans to replace a regulation established during President Biden's presidency regarding global access to U.S.-origin AI chips. However nearly a year later, no replacement has been published, and the earlier rule remains unenforced, creating an opportunity for Chinese companies outside China to potentially acquire these chips through a loophole.

An interagency committee comprising representatives from various government departments makes decisions on adding entities to a specific list. The committee's members include officials from the departments of Commerce, Defense, Energy, State and occasionally Treasury. Unpublished company approvals have been reported by two sources familiar with the process.

According to a source, at least seventy-five Chinese companies involved in sophisticated semiconductor production, equipment manufacturing, and artificial intelligence development are on track for blacklisting by the committee.