DJI, the biggest commercial and consumer drone manufacturer in the world, lost its case against the Federal Government after U.S. District Judge Paul Friedman ruled against the company. According to the South China Morning Post, the court agreed with the Department of Defense, stating that it had sufficient evidence to include the drone maker in the Section 1260H list, which designates certain institutions as “Chinese military companies.”
The company was first added to the Pentagon’s list in 2022, and it sued the federal government over this designation last year. DJI claims that it’s neither owned nor controlled by the Chinese military, and that it has “lost business deals, been stigmatized as a national security threat, and been banned from contracting with multiple federal government agencies.” Despite this loss, it said that it will continue operating in the U.S. and explore other legal remedies.
“While DJI is pleased that the court agreed with DJI and rejected most of DoD’s purported justifications for listing DJI, we are disappointed that the court nonetheless upheld the listing,” a company spokesperson said in response to the ruling. “This decision was based on a single rationale that applies to many companies that have never been listed.”
Although being included in the list is not an outright ban, it makes doing business more difficult in the U.S. and could even lead to further, more drastic actions. In fact, the company narrowly escaped a proposed law that would have prohibited its sales within the United States. However, it must still undergo a security review in 2025 to prove that its products aren’t a national security risk.
DJI has been facing these challenges due to its market dominance and its Chinese origin. Despite not creating military drones, lawmakers are concerned that, due to the ubiquity of its products in the American market, Beijing could force it to insert a backdoor in its products. This would allow the U.S.’s main rival unfettered access to its secrets, especially for drones used by the civilian government.
China-based DJI isn’t the only company that has challenged the U.S. government over its designation as a Chinese military company. Hesai Group, which manufactures Lidar components for vehicles, also sued the DoD, with the same judge ruling against the company in mid-2025. It has since appealed the decision and is waiting for word from a higher court.
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