A Trump White House memo has purportedly accused Alibaba, headed by Joe Tsai, of providing “technological support” for Chinese military operations against targets in the United States, the Financial Times
said on Friday, citing a leaked White House memo reportedly based in part on highly classified intelligence.
However, the report from FT, the respected London-based newspaper, did not specify which of the Chinese company’s technologies had reportedly been provided to the Chinese military, how the People’s Liberation Army might be using them or the targets. Indeed, the FT reported it could independently verify the claims in the memo. Still, BABA stock dropped 3.7% on the news.
Reuters, the international news agency, encapsulated the Financial Times on the White House memo, saying …
The national security memo includes declassified top secret intelligence on how the Chinese group supplies the People’s Liberation Army with capabilities that the White House believes threaten U.S. security, the FT reported.
The report did not specify which capabilities or operations were involved, or whether the U.S. was seeking to respond in any way.
In response, Alibaba has strongly denied the claim, raising issues about the sourcing, motivation and timing of the leak. There are even suggestions that Alibaba has gotten caught between competing interests on U.S.-China policy within the Trump administration. The leak comes at a time when economic relations between the two countries have improved following a summit between Presidents Donald J. Trump and Xi Jinping two weeks ago in South Korea.
Tsai, who’s been part of the Nets ownership group since 2017 and the principal owner and governor since 2019, is the chairman and a co-founder of Alibaba which has grown from its e-commerce roots to become a worldwide leader in artificial intelligence (AI) and cloud technology. In recent months, its stock has soared in part because of its success in AI. Its latest family of AI products known as Qwen, is seen as one of the world’s most advanced and a competitor for U.S. AI models.
There’s no indication at the moment that the news will have any effect on the Nets, Liberty or Barclays Center, all of which are held by Brooklyn Sports & Entertainment, Joe and Clara Wu’s parent company. Tsai’s net worth, estimated at around $12 billion, is divided almost equally between his Alibaba stock and his sports holdings as NetsDaily reported this summer. Although Alibaba is one of China’s biggest companies, Tsai is a native of Taiwan and a citizen of Canada where he spent years as a child in Vancouver. Clara Wu Tsai. a native of Kansas, is a U.S. citizen. The Tsais have homes in both New York and San Diego.
“The claims purportedly based on US intelligence that was leaked by your source are complete nonsense. This is plainly an attempt to manipulate public opinion and malign Alibaba.” the company told the FT when asked about the memo.
“The assertions and innuendos in the article are completely false,” Alibaba added in a follow-up comment to news organizations, including ND. “We question the motivation behind the anonymous leak, which the FT admits that they cannot verify. This malicious PR operation clearly came from a rogue voice looking to undermine President Trump’s recent trade deal with China.”
In the summit between the Presidents Trump and Xi Jin Ping on October 30, the U.S. and China reached was what called a “fragile truce” and a “basic framework” on tariffs and other economic issues. The agreements reached in Busan, South Korea, were generally seen as a victory for Xi and China in that the U.S. pared down its threatened increase in tariffs between the world’s biggest trading partners while China agreed to re-purchase U.S. agricultural products. Tsai in fact had praised the “wisdom” of the two leaders prior to the summit.
Alibaba’s AI and Cloud products are used in a number of industries around the world. Last month, the company and NBA China signed a deal while the Nets were in Macao that will make Alibaba the official Al and Cloud provider for the league’s China operations specifically noting that Alibaba Cloud will develop innovative applications to enhance live game viewing and other fan engagement experiences, including in conjunction with NBA All-Star, the NBA Playoffs and the Finals. It mirrors a similar deal Alibaba has with the International Olympic Committee over the past three Olympiads.
Geopolitics did play a role in the Nets’ last ownership transfer following the imposition of sanctions against Russia in 2014 following the Russian invasion of Crimea. Russian president Vladimir Putin pushed Mikhail Prokhorov to sell his interest in the Nets. He ultimately reached a deal with Tsai.
