DJI Defeated: US Court Upholds Pentagon's "Chinese Military Company" Label

DJI Loses Lawsuit Over Pentagon's 'Chinese Military Company' List A US District Court judge ruled against DJI on Friday, upholding the Department of Defense's designation of the drone maker as a "Chinese military company." The decision marks a significant setback for DJI, which had challenged the designation in October 2024. Judge Paul Friedman wrote that the DoD presented sufficient evidence demonstrating DJI's technology has both theoretical and actual military applications. Despite DJI's claims that its policies prohibit military use, Friedman stated that this does not change the fact that its technology can be used for such purposes. DJI had argued that it suffered "ongoing financial and reputational harm" as a result of the designation, which can prevent companies from accessing grants, contracts, loans, and other programs. The company claimed to be "neither owned nor controlled by the Chinese military," but Friedman's ruling suggests this assertion was not enough to overcome the DoD's evidence. The decision has significant implications for DJI's business operations in the US. As a designated "Chinese military company," DJI may face increased scrutiny and potential restrictions on its activities. The designation could also impact the company's ability to secure contracts with government agencies, which are a crucial source of revenue for many technology companies. DJI's inclusion on the DoD's list is part of a broader trend of increasing tensions between the US and China over issues related to national security and trade. In 2020, the Department of Commerce added DJI and 77 other Chinese companies to its Entity List, citing concerns about their ties to the Chinese military. Industry analysts say the ruling will likely have far-reaching consequences for DJI's business operations in the US. "This decision sends a clear signal that the DoD is willing to take a tough stance on national security issues," said Michael Brown, an analyst with market research firm IDC. "For companies like DJI, it means they need to be prepared for increased scrutiny and potential restrictions on their activities." The ruling also raises questions about the impact of the designation on DJI's customers and partners in the US. "This decision could have significant implications for companies that rely on DJI technology," said Tom Johnson, a lawyer specializing in export control regulations. "They may need to re-evaluate their relationships with DJI and consider alternative suppliers." As the situation continues to unfold, DJI has not commented on its plans or next steps. The company's stock price dropped by 5% following the announcement of the ruling. In related news, the US government is expected to continue reviewing its policies regarding Chinese companies operating in the US. The Department of Defense and other agencies may also take further action against companies deemed to be tied to the Chinese military. The decision marks a significant setback for DJI, which had argued that it was unfairly targeted by the DoD's designation. As the situation continues to evolve, one thing is clear: the ruling will have far-reaching consequences for DJI and other companies operating in the US-China technology landscape. *Reporting by Engadget.*