Bloomberg Tech – US Pulls List of Tech Firms Linked to China’s Military

Date: February 13, 2026
Hosts: Caroline Hyde & Ed Ludlow

Episode Overview

This episode of Bloomberg Tech examines a dramatic move by the U.S. Department of Defense: briefly posting, then abruptly withdrawing, an expanded list of Chinese technology firms—such as Alibaba, Baidu, and BYD—alleged to have military connections. The episode unpacks the reasons behind this reversal and its implications for markets, national security, and the broader U.S.-China AI rivalry. Additional segments cover AI investment trends, the ongoing “AI scare trade,” major tech earnings (including Rivian, Airbnb, Instacart, Coinbase, and Twilio), and evolving attitudes in both private and public tech markets.

Key Discussion Points

1. Pentagon's List of Chinese Tech Firms Linked to Military (02:15–07:11)

• The Incident:
  The U.S. Department of Defense briefly posted an updated version of its so-called “1260H list”— now with 130 Chinese companies allegedly tied to the Chinese military, including tech heavyweights Alibaba and Baidu. Within hours, the list was withdrawn without explanation, sparking confusion and immediate repercussions for U.S.-listed shares of those firms.

  “The Pentagon added names Alibaba, Baidu and BYD to a list... only to then take down or pull that list without any explanation. The moment the headlines hit from the list going up, you saw the US listed shares of those names drop.”
  — Caroline Hyde, 03:18

• Investor and Geopolitical Implications:
  The 1260H list is closely watched as a precursor to potential sanctions or further measures. The sudden withdrawal leaves investors and observers speculating about internal debate or errors within the administration.

  “This is something that’s become increasingly closely watched... as a precursor or bellwether to further measures that the government has taken against Chinese entities."
  — Caroline Hyde, 04:33

• AI as a Strategic Battleground:
  Focus on Alibaba and Baidu stems from their significant AI advancements—considered a central point of technological competition between the U.S. and China.

2. OpenAI’s Security Concerns About Chinese AI Lab Deep Seek (05:32–07:11)

• OpenAI has warned Congress that China’s Deep Seek is allegedly using improper methods, such as “model distillation,” to copy and advance its own AI systems.

• National security concerns arise, as Deep Seek censors sensitive topics within China (e.g., Tiananmen Square, Taiwan), potentially giving the government indirect influence over information access.

  “OpenAI has warned U.S. lawmakers that it believes Deep Seek has been using improper methods to advance its models… And OpenAI went further to say that it has been raising these concerns… It also noted what it called a national security risk.”
  — Caroline Hyde, 05:46

3. Anthropic’s $30B Fundraise and AI Investor Dynamics (07:11–09:14)

• Rising Valuations & Double-Dipping Investors:
  Anthropic closed a $30B round, doubling its valuation to $380B; many major VCs backing OpenAI have also invested in Anthropic—a phenomenon termed "double-dipping".

  “We are seeing what we have kind of colloquially referred to as double dipping… Investors… hedg[ing] their bets and also invest in competitors such as Anthropic.”
  — Sarah Kent, 07:36

• Enterprise Focus and Revenue Growth:
  Anthropic's annualized revenue run rate has grown from $9B to $13B in a short time, particularly propelled by its coding agent “Claude Code.” The company, while not as consumer-facing as OpenAI, is seen as a powerful enterprise player.

  “Anthropic, even though it doesn’t have the kind of consumer reach that OpenAI does… shouldn’t be counted out… able to achieve some very high revenue projections and very strong growth...”
  — Sarah Kent, 08:35

4. “AI Scare Trade” and Market Volatility (09:36–13:52)

• AI-Induced Market Jitters:
  Small firms in logistics and other domains (including a $6M valuation karaoke company) are causing outsized ripple effects on public equities due to investor fears of AI-driven disruption.

  “Shares of C.H. Robinson tumbled 15%, adding to a growing list of companies where AI fears are reshaping investor sentiment across sectors.”
  — Ed Ludlow, 09:36

  “Everything is a very knee jerk reaction now… ‘sell first, ask questions later’… all these kneejerk reactions to AI disruption.”
  — Sarah Kent, 13:19

• Fund Manager Insights:
  Investors are urged to distinguish between real disruption and hype. Some startups are seen as “megaphones, not necessarily unicorns,” if they garner attention without substance.

  “We want to find companies that are going to disrupt markets because they have a great product, not because they have great Twitter fingers.”
  — Sarah Kent, 14:38

• Sectoral Risk and Preparedness:
  Incumbents in sectors like logistics are aware and often proactive about tech-driven shifts, investing internally and externally to stay ahead.

5. Venture Investment Trends & Startup Valuations (16:11–17:54)

• Barbell Market:
  Large, buzzy AI startups like Anthropic are seeing sky-high valuations and rapid funding, while more traditional or niche startups face subdued investment interest.

  “There’s a huge barbell right now in valuations for startups. Handful in AI… going up and up. Others… less velocity, not because anything is wrong, they just aren’t promising the world.”
  — Sarah Kent, 16:28

• Solid SaaS Companies:
  Reliable enterprise software incumbents like Salesforce remain stable, but investor psychology is dominated by AI FOMO.

  “Why do people… think [Salesforce] is going to go away overnight… all these companies are going to be valueless. It just doesn’t make sense.”
  — Sarah Kent, 17:25

6. Twilio Earnings and AI’s Workplace Role (20:51–26:50)

• Twilio's Growth & Business Model:
  Twilio’s Q4 performance was buoyed by growth in voice and messaging, with the company positioning itself as foundational infrastructure for AI-driven workloads. CEO Kazama Chip Chandler notes long-term alignment via a usage-based pricing model, providing some insulation from SaaS “apocalypse” fears.

  “Our pricing model has always been usage based… it matches a customer's revenue events with our revenue events. And so our incentives are very, very tightly aligned.”
  — Kazama Chip Chandler, 24:43

• AI and Employment:
  Chandler believes AI will enhance, not replace, the workforce—especially as future workers become “AI natives.”

  “I don't think AI is per se coming for the workforce. I think, frankly, it's going to be tremendously additive… Over the next five to seven years, you're going to have a whole slew of college graduates who are AI natives.”
  — Kazama Chip Chandler, 25:46

7. Earnings Roundup: Rivian, Airbnb, Instacart, Coinbase, Applied Materials (27:23–35:41)

• Rivian:
  Market optimism centers on the forthcoming R2 mass-market EV, despite ongoing losses and low volume.

  “All they're saying is that, you know, things are going as they said they would… but they're still going to lose $2 billion this year.”
  — Caroline Hyde, 29:45

• Airbnb:
  Booking innovations (e.g., Reserve Now, Pay Later) and business diversification (airport pickup, grocery delivery) drive strong global growth.

  “They're expecting to roll this out to more markets globally... CEO Brian Chesky really put a big focus on launching new businesses.”
  — Natalie Lung, 30:10

• Instacart:
  Strongest projected quarterly growth since IPO; strategic tech tools (e.g., white-label solutions, recommendation engines) power a third of revenue.

  “Their partnership with Uber allowing people to auto takeout has also helped with demand." — Natalie Lung, 31:24

• Coinbase & Crypto Sector:
  Q4 revenue fell 20% amid falling token prices and reduced volumes, though shares rebounded 16% as investors speculated that the worst was priced in.

  “The idea here is now basically that… we're looking for a bottom, that maybe the worst is already priced into this stock.”
  — Natalie Lung, 32:59

• Applied Materials:
  Despite China “pulling away” in orders, surging demand for data center equipment leads to a robust 9% stock gain.

8. Early Stage VC Trends: Seed Round Inflation & AI Opportunities (39:18–43:57)

• Larger VC Funds, Bigger Rounds:
  Early-stage firm Primary closes $625M fund as average seed round sizes quadruple over the past decade; capital inflows are justified by higher quality founders (often veterans from previous tech successes) and unprecedented opportunity in AI.

  "Each kind of generation of startups just gets a step function higher and higher. And now with what's happening in AI, we think the outcomes are going to be that much greater."
  — Ben Sun (Primary), 40:30

• AI Unlocking Massive Markets:
  AI now seen as augmenting or replacing human labor, vastly expanding the addressable market.

  "AI is replacing or augmenting human labor… we're talking about a market that's trillions of dollars, not hundreds of billions."
  — Ben Sun, 43:00

9. Social Media, Regulation, and Teen Bans (45:11–48:21)

• Current Impact:
  High-profile lawsuits and new under-16 bans (starting in Australia) aren’t yet denting revenues or user bases for major platforms. Teens aren’t high-value ad targets, and the volume of banned accounts is a statistical blip.

  “The number of accounts that are being removed are drops in the bucket... not a real threat to the business of these companies.”
  — Kurt Wagner, 45:36

• Business Model Health:
  Despite the scrutiny, ad revenue remains strong for giants like Meta.

  “All of these businesses continue to grow their ads business quite considerably... Meta was more than 20% year over year.”
  — Kurt Wagner, 46:45

• Reputational & Long-Term Risk:
  Executives face tough congressional scrutiny over alleged “addictive” product design, potentially impacting brand equity if youth disengage en masse.

  “If you get a whole generation of teenagers who stop using these products, that is… not good for Meta.”
  — Kurt Wagner, 47:48

10. AI Lobbying and the “Crypto Playbook” (48:21–50:37)

• Industry Mobilization:
  Leading VC firms and AI “frontier labs” are channeling funds into PACs (“Leading the Future”) to influence policy, mimicking successful campaign strategies from the crypto industry.

  "They're pouring millions of dollars into congressional races… The memory of Fair Shake, crypto's big PAC, looms large… we're going to see that play out over and over."
  — Emily Birnbaum, 48:50

• Strategic Messaging:
  Campaigns focus on district-specific issues unrelated to AI/crypto to win favor, creating indirect influence over regulatory attitudes.

  “They're focusing on ICE in New York, they're focusing on Trump ally, his MAGA accolades in Texas… people in those states don't necessarily know that it's the industry behind these advertisements.”
  — Emily Birnbaum, 49:47

Notable Quotes & Memorable Moments

• Caroline Hyde (03:18): “The Pentagon added names Alibaba, Baidu and BYD... only to then take down or pull that list without any explanation… stocks dropped as soon as the headlines hit.”
• Sarah Kent (13:19): “Everything is a very knee jerk reaction now... sell first, ask questions later.”
• Kazama Chip Chandler, Twilio CEO (25:46): “I think what’s going to happen... is that over the next five to seven years, you’re going to have a whole slew of college graduates who are AI natives...”
• Ben Sun, Primary (43:00): “AI is replacing or augmenting human labor... we're talking about a market that's trillions of dollars...”
• Kurt Wagner (45:36): “The number of accounts that are being removed are drops in the bucket... not a real threat to the business of these companies.”
• Emily Birnbaum (48:50): “Now the AI companies... are pouring millions of dollars into congressional races across the country... they're going to be making the argument that this is good for American dominance over China.”

Timestamps for Key Segments

• Main Story: US Pulls List of Chinese Tech Firms: 02:15–07:11
• OpenAI Security Concerns: 05:32–07:11
• Anthropic $30B Deal & AI VC Trends: 07:11–09:14
• AI Scare Trade & Market Reaction: 09:36–13:52
• Venture Capital & Startup Valuations: 16:11–17:54
• Twilio CEO Interview: 20:51–26:50
• Earnings: Rivian, Airbnb, Instacart, Coinbase, Applied Materials: 27:23–35:41
• Early Stage VC: Ben Sun (Primary): 39:18–43:57
• Social Media Regulation: 45:11–48:21
• AI Lobbying/Political Strategizing: 48:21–50:37

Conclusion

This episode offers a comprehensive look at national security tensions between the U.S. and China, specifically around tech giants and AI innovation, and explores how these concerns cascade into capital markets, investment strategies, and regulatory landscapes. It also provides timely reporting on the state of tech earnings, startup valuations, market psychology, and public-facing narratives in both AI and broader technology industries.