Hesai Technology, a Shanghai-based manufacturer of lidar sensors used in autonomous vehicles and robotics, is deepening its presence in the United States despite being designated a Chinese military entity by the U.S. Department of Defense in 2024 — a classification that security researchers say opens American critical infrastructure to potential cyberthreats.
The company's blacklist designation bars it from securing Pentagon contracts, but does not prohibit U.S. companies from incorporating its products into commercial systems. Under an expanded partnership with Nvidia announced at the Consumer Electronics Show in January, Hesai sensors will be among the options automakers can select when integrating into Nvidia's autonomous vehicle platforms.
Nvidia CEO Jensen Huang said during his CES keynote address that "some day, every single car, every single truck will be autonomous," underscoring the strategic weight the chipmaker places on the self-driving segment. Huang has described robotics, which includes autonomous vehicles, as the company's second most important growth category after artificial intelligence. Nvidia's latest annual filing shows automotive revenue for fiscal year 2026 rose 39% from the prior year, driven by adoption of its self-driving platforms.
Hesai's reach extends well beyond the Nvidia partnership. Its sensors are integrated into systems operated by Amazon's robotaxi company Zoox, autonomous trucking firms Waabi and Kodiak, autonomous vehicle technology company Nuro, and agricultural automation firm Agtonomy. The sensors are also deployed at New York's John F. Kennedy International Airport, where they monitor passenger and traffic flow at security checkpoints and gate entrances.
Critics warn that the proliferation of Chinese-made lidar across U.S. infrastructure presents a serious vulnerability. Craig Singleton, a senior director for the China Program at the Foundation for Defense of Democracies, told CNBC that as these sensors move closer to defense nodes, utility grids, and airports, the data they collect could be turned against American interests.
"That data is so sensitive and it's so precise that it could be weaponized by a hostile foreign power if they ever wanted to target our infrastructure," Singleton said.
Singleton also pointed to Hesai's SEC filings, in which the company disclosed that the Chinese government has "significant oversight in regulating our operations and may influence or intervene in our operations at any time." He argued that provision means Hesai can be legally compelled to share sensor-collected data with Beijing. "Whether they want to transmit that information or not isn't a question, it's mandated by law," he said.
Hesai co-founder and CEO David Li rejected those characterizations in his first extended interview about the blacklist designation. "In the DOD case, I don't feel there is sufficient evidence, and it's not logical," Li said. "We are frustrated by that." Li maintained that the company does not work with China's military and that its products are safe.
Lidar — an acronym for "light detection and ranging" — works by emitting laser pulses and measuring the time it takes for them to return after bouncing off nearby objects. Those measurements are then assembled into three-dimensional point-cloud maps that allow autonomous machines to perceive and navigate their environments, making the technology foundational to the broader physical AI buildout now underway across the U.S.
The tension between Hesai's commercial expansion and its national security designation reflects a broader unresolved question in Washington about how far existing blacklist mechanisms can reach into commercial supply chains. With autonomous systems becoming more embedded in American infrastructure, the gap between the Pentagon's designation authority and civilian procurement rules is likely to face growing scrutiny from lawmakers and regulators.
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