Alibaba is reportedly assisting the Chinese military in targeting the United States, according to a White House memo cited by the Financial Times on Friday.

The memo allegedly claims that "Alibaba provides tech support for Chinese military 'operations' against targets in the U.S."

The Financial Times noted that it could not independently verify the contents of the memo and did not publish the full document. The timing of the memo's release remains unclear, according to the FT.

Alibaba strongly denied the allegations. "The assertions and innuendoes in the article are completely false," the company said in a statement, CNBC reported. It added: "We question the motivation behind the anonymous leak, which the FT admits that they cannot verify. This malicious PR operation clearly came from a rogue voice looking to undermine President Trump's recent trade deal with China."

Last month, U.S. President Donald Trump met Chinese President Xi Jinping in South Korea for their first face-to-face meeting since Trump began his second term in January. The two leaders agreed to roll back tariffs and export controls for 12 months, easing the tensions that had escalated earlier this year.

Over the past several years, the U.S. has intensified efforts to restrict China's access to advanced semiconductors, which are critical for training AI models.

"The rapid drop in Alibaba's stock price following the report underscores how much China's AI industry is on edge over potential new sanctions," said Kyle Chan, a Brookings Institution fellow focusing on Chinese technology.

Alibaba's shares closed 3.78% lower in the U.S. on Friday following the report, but were up more than 1% in Hong Kong on Monday.

Chan noted that the FT report comes as Alibaba's open-source Qwen AI model gains traction in Silicon Valley, posing increased competition to subscription-based AI models from U.S. firms such as OpenAI and Anthropic. He also highlighted growing investor concerns about a potential AI bubble.

Alibaba is scheduled to release its quarterly earnings on Nov. 25 ahead of the U.S. market open.