US government now classifies Tencent as a Chinese military company

The United States government has now classified, Tencent, one of the largest investors in the gaming industry as a Chinese military company. This comes amidst the growing US sanctions against domestic tech companies for supplying semiconductors to Chinese companies. Tencent has called this decision a mistake.

Simply being on the list does not mean much. The companies are still free to conduct their business as usual. However, companies on the list are either considered to be controlled by the Chinese military or serve the growth of China's civil-military complex. This can easily lead to other companies backing out from investing or conducting other business.

Tencent has a significant investment in the gaming industry. Game studios like Riot Games developers behind Valorant and League of Legends, and Grinding Gear Games are famous for creating the Path of Exile, are completely owned by Tencent. Other big names like Epic Games, FromSoftware, Larian Studios, and a lot more gaming companies also have Tencent as one of the backers.

Also Read: Nvidia slapped with antitrust investigation by China over AI chips

Tencent says it ‘won’t affect business’

Tencent has strongly opposed this decision, however, reassured that this won’t be affecting its business. “We are not a military company or supplier. Unlike sanctions or export controls, this listing has no impact on our business. We will nonetheless work with the Department of Defense to address any misunderstanding,” Tencent said speaking to Bloomberg.

This isn’t the first time Tencent has come under fire. The Indian government also banned several applications developed by Chinese companies a few years back. PUBG Mobile, one of the most popular mobile gaming titles was also among the banned applications leading Krafton to develop a specific Indian version, BGMI.

Now the tension between the US and China is also rising following the re-election of Donald Trump, which can lead to further sanctions across both countries.