Chinese authorities have instructed domestic companies to stop using cybersecurity software from approximately a dozen U.S. and Israeli firms, citing national security concerns over potential data collection and transmission abroad, according to a report published Tuesday by Reuters.
The directive, issued in recent days, affects major technology companies including Palo Alto Networks, Fortinet, Broadcom-owned VMware, and Israel’s Check Point Software Technologies, two sources familiar with the matter told Reuters. The sources declined to be named due to the sensitivity of the situation.
Shares fell in premarket trading Wednesday, with Palo Alto Networks and Fortinet declining as much as 3%, while Check Point slid around 1%. It remains unclear how many Chinese companies received the notice.
Escalating Tech Tensions
The ban represents Beijing’s latest move to replace Western technology with domestic alternatives amid escalating U.S.-China competition for tech dominance. Chinese officials expressed concern that foreign cybersecurity software could gather sensitive data and send it overseas, the sources said.
China’s internet regulator, the Cyberspace Administration of China, and the Ministry of Industry and Information Technology did not respond to requests for comment. The four companies named also did not reply to Reuters queries.
The directive comes as China has intensified efforts to build up domestic capabilities across multiple technology sectors. While Beijing’s push to develop its semiconductor and artificial intelligence industries has drawn the most attention, it has also sought to phase out Western-made computer equipment and software, according to Reuters.
Chinese analysts have said Beijing has grown increasingly concerned that Western technology could be vulnerable to hacking or surveillance by foreign governments.
