According to a recent Financial Times report, Google and OpenAI sold sold advanced AI models to Singapore-based subsidiaries of Chinese companies banned by the US Pentagon. The companies in question include Alibaba, Baidu Inc, and Tencent Holdings Ltd. The Financial Times report notes that both Google and OpenAI have confirmed that they had provided AI services to the Singapore affiliates of the aforementioned Chinese companies.
Why Were US AI Companies Able To Transact With Banned Chinese Firms?
Alibaba, Baidu Inc, and Tencent Holdings Ltd. are on the Pentagon’s 1260H list. This is a list of companies that the US government alleges has ties to the Chinese military. Despite their Chinese origin, the Financial Times report notes that the transactions between OpenAI, Google, and the Chinese firms are legal. This is because current US regulations do not entirely ban Chinese-headquartered firms from using advanced US-based AI models outside mainland China.
The development may lead to the US bringin in stricter regulations for AI use against sanctioned and banned companies. OpenAI told the Financial Times that it blocks direct access to its AI models from mainland China. However, it allows some Chinese-owned businesses to use its services in other jurisdictions where appropriate safeguards can be enforced.
Let’s discuss if Alphabet (Google’s parent company) will see a dip in its stock price following the revelation.
Will Google Stock Price Dip After Selling AI Models To Chinese Companies?
Alphabet (GOOG) is already seeing some negative price action in the pre-market. Google closed 0.69% (2.47 points) lower at close on July 9, 2026. The stock has further dipped by 0.29% (1.04 points) in the pre-market hours. It is possible that investors are reacting to the Financial Times report.
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Google may see its stock price dip further after the market opens today.
