China-based DJI Sues U.S. Defense Department Over Chinese Military Designation

China-based DJI, the world’s largest drone manufacturer, sued the U.S. Defense Department on Friday for labeling it a “Chinese military company,” a designation that the company argues is incorrect and has caused significant financial harm.

DJI, which sells over half of all U.S. commercial drones, filed a lawsuit in a Washington district court, asking for its removal from the Pentagon’s list. The company claims it is neither owned nor controlled by the Chinese military. DJI said this designation has damaged its reputation, resulting in lost business deals, and has led to a ban on contracting with federal agencies.

“Due to the Defense Department’s unlawful and misguided decision, DJI has been stigmatized as a national security threat,” the lawsuit states. DJI also claims that customers in the U.S. and internationally have canceled contracts and are refusing new ones.

The Pentagon has not yet responded to the lawsuit, which DJI filed after over 16 months without engagement from U.S. officials. DJI said it had no choice but to seek legal relief after repeated efforts to resolve the issue were ignored.

DJI’s lawsuit comes amid broader U.S. efforts to target Chinese companies over national security concerns, with other firms like memory chip maker YMTC, China Mobile, and aviation company AVIC also on the Pentagon’s list. This week, DJI also revealed that some of its drones are being blocked from entering the U.S. under the Uyghur Forced Labor Prevention Act. The company denies any involvement in forced labor.

DJI has long faced scrutiny from U.S. lawmakers over concerns that its drones pose surveillance and data transmission risks. Last month, the U.S. House voted to bar new DJI drones from operating in the country, and the Commerce Department is considering restrictions that could lead to an effective ban on Chinese drones.

As pressure mounts, DJI continues to fight its designation, maintaining it has no military ties and poses no threat to U.S. national security.