What just happened? Tencent, the tech giant that has investments and ownership stakes in firms ranging from Riot and Epic to Activision Blizzard and Reddit, has been added to the Department of Defense's list of Chinese military companies. The move will not result in any immediate sanctions or export controls, but it has caused reputational damage and could make it more difficult for Tencent to continue making investments in American businesses. Tencent appeared on an updated version of the Section 1260H list this week. The DoD's list contains the names of companies that the agency believes are part of China's "Military-Civil Fusion strategy," a national strategy of the Chinese Communist Party (CCP) to develop the People's Liberation Army (PLA) into a "world class military" by 2049 by collaborating with local firms and civilian researchers.Tencent is the sole owner of League of Legends maker Riot Games, holds a 40% stake in Epic Games, has stakes in Snap and Activision Blizzard, Larian Studios, and FromSoftware, and has invested in Reddit and Discord.No reason was given for why Tencent was added to the list. The company said its inclusion was "clearly a mistake" and it will appeal. Tencent's Danny Marti told The Verge that the designation "has no impact on our business.""We will nonetheless work with the Department of Defense to address any misunderstanding," Marti added.Consequences of being on the 1260H list aren't as severe as being on the Entity list, which includes Huawei, as those on it cannot do business with US companies unless Washington issues a license. However, some organizations chose to stop working with companies after they were added to the 1260H list. // Related StoriesTencent owns WeChat, the messaging platform and payment service that's incredibly popular in China. WeChat was banned from Canada's government devices in 2023 due to an "unacceptable level of risk to privacy and security."Joining Tencent on the 1260H list is CATL, the world's largest electric vehicle battery maker whose customers include Tesla. CATL also said its inclusion was "a mistake."Ford said it would invest $2 billion to build a battery plant in Michigan. The US automaker has said it plans to license technology from CATL.Tencent's US-listed shares fell 7.8% following the news.Liu Pengyu, a spokesperson for the Chinese embassy in Washington, told the BBC, "The US's practices violate the market competition principles and international economic and trade rules that it has always advocated, and undermine the confidence of foreign companies in investing and operating in the United States."Drone maker DJI and Lidar-maker Hesai Technologies both sued the Pentagon last year for their inclusion on the list, where they still remain.There may still be hope for Tencent and CATL. Xiaomi was added to the list in 2021 but removed just a few months later.