Here’s a situation that would make any compliance lawyer reach for antacids. Hesai Technology, the Chinese lidar manufacturer listed on NASDAQ, was formally designated a Chinese military company by the U.S. Department of Defense in January 2024. A federal court upheld that designation in July 2025. And in January 2026, Nvidia chose Hesai as a lidar supplier for its next-generation autonomous driving platform.
The blacklist, the lawsuit, and the court’s answer
The DoD added Hesai to its Section 1260H list of Chinese military companies on January 31, 2024. The list is essentially Washington’s way of flagging firms it believes contribute to China’s military capabilities, even if those firms operate primarily in commercial markets.
Hesai pushed back immediately, filing a lawsuit to challenge the designation. The argument was straightforward: the company makes sensors for self-driving cars, not weapons systems. A U.S. District Court disagreed, upholding the Pentagon’s designation on July 11, 2025.
The road to that ruling had a strange detour. Hesai was temporarily removed from the list in late 2024, only to be reinstated after the DoD said new information had come to light.
