Amazon's Zoox and dozens of other U.S. autonomous vehicle companies depend on lidar sensors from Hesai Technology, a Shanghai-based manufacturer blacklisted by the U.S. Department of Defense in 2024 as a Chinese military entity. While the blacklist prevents Hesai from securing Pentagon contracts, it does not legally prohibit U.S. companies from using its technology in commercial applications. The arrangement has sparked a national security debate about whether Chinese-made sensors could become a backdoor for cyberattacks or data theft.

What Is Lidar and Why Does It Matter for Self-Driving Cars?

Lidar, which stands for "light detection and ranging," is the critical sensor technology that allows autonomous vehicles and robots to see their surroundings. The sensors work by firing laser pulses and measuring how long it takes for them to bounce off objects and return. By combining thousands of these measurements, lidar creates a three-dimensional map, or "point cloud," that enables self-driving systems to navigate safely.

Hesai is one of the dominant suppliers in the global autonomous technology ecosystem. Beyond Zoox, its sensors are integrated into autonomous trucking companies such as Waabi and Kodiak, autonomous vehicle technology company Nuro, and agricultural automation firm Agtonomy. The sensors are even deployed at New York's John F. Kennedy International Airport to monitor passenger and traffic flow at security checkpoints and gate entrances.

How Did a Blacklisted Company Become So Central to U.S. Robotaxi Development?

Hesai's expansion in the United States has accelerated despite its Pentagon blacklist status. Under an expanded partnership announced in January 2026, Hesai sensors will be one of the options automakers can choose to integrate into Nvidia's autonomous vehicle platforms. Nvidia CEO Jensen Huang has stated that "our vision is that some day, every single car, every single truck will be autonomous," and the chipmaker reported that automotive revenue for fiscal year 2026 was up 39% from the prior year, driven by adoption of its self-driving platforms.

The legal distinction is important: the Pentagon blacklist prevents Hesai from securing federal contracts, but it does not prevent U.S. companies from purchasing and using Hesai's commercial products. This gap has allowed the company to deepen its footprint in the autonomous vehicle industry even as government officials and security experts raise alarms.

What Are the National Security Concerns?

Security experts argue that Chinese-made lidar sensors could expose critical U.S. infrastructure to serious risks. Craig Singleton, a senior director for the China Program at the Foundation for Defense of Democracies, told CNBC that as Chinese lidar sensors become more prolific across the United States, they will move closer to defense nodes, utility grids, and airports. "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.

Researchers and critics have also raised concerns that lidar sensors could be compromised using malware, with potentially serious consequences for autonomous systems. Additionally, the Chinese government has significant oversight authority over Chinese companies. In its SEC filings, Hesai has disclosed that the Chinese government has "significant oversight in regulating our operations and may influence or intervene in our operations at any time".

"Whether they want to transmit that information or not isn't a question, it's mandated by law," said Craig Singleton, senior director for the China Program at the Foundation for Defense of Democracies.

Craig Singleton, Senior Director for the China Program at the Foundation for Defense of Democracies

What Does Hesai Say About These Concerns?

David Li, Hesai's co-founder and CEO, has rejected allegations that the company poses national security risks or could be used by the Chinese government to collect data. In his first extended interview about the blacklist designation, Li defended the company against the Pentagon's decision. "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 also argued that Hesai's sensors hold no data because they lack the memory capacity to store information. He stated that Hesai's partners are responsible for securing the data the sensors collect and that Hesai has no control over that process. However, security experts remain unconvinced by these assurances, pointing to the precedent of other Chinese technology companies that were later found to pose national security risks.

How Has This Situation Happened Before?

The Hesai situation echoes a troubling pattern in U.S. technology adoption. Companies in the United States have previously embraced low-cost Chinese technology, even from entities that had been blacklisted, only to later spend billions replacing it after the products raised national security concerns.

• Huawei: The Chinese telecommunications giant was placed on the Defense Department's blacklist in 2021, but that did not stop U.S. companies from using Huawei products. The Federal Communications Commission forced U.S. companies to "rip and replace" Huawei products from their networks beginning in July 2021.
• DJI: The world's largest drone maker was blacklisted in 2022 by the Pentagon for its ties to the Chinese government. A federal judge ruled in 2024 that there was "substantial evidence" that the company contributes to China's defense industrial base, and DJI is appealing the decision.
• TP-Link: The Wi-Fi router maker was added to the Pentagon's blacklist in June 2026 after selling popular consumer goods in the United States.

Steps to Understanding the Lidar Supply Chain Risk

As autonomous vehicle adoption accelerates, understanding the supply chain risks becomes increasingly important for policymakers and industry stakeholders. Here are the key considerations:

• Sensor Dependency: Lidar sensors are essential components of autonomous vehicle systems, and Hesai controls a significant portion of the global supply. This concentration creates vulnerability if the company's technology is compromised or restricted.
• Data Collection Scope: Lidar sensors deployed across airports, highways, and urban infrastructure collect vast amounts of precise spatial data. If this data could be accessed by foreign governments, it could reveal sensitive information about critical infrastructure locations and operations.
• Regulatory Lag: The rapid deployment of autonomous systems is outpacing government scrutiny over potential security risks. Unlike the Huawei case, which took years to resolve, autonomous vehicle adoption is accelerating without clear regulatory frameworks in place.
• Replacement Costs: If the U.S. government eventually forces companies to replace Hesai sensors with alternatives, the financial and operational burden could be substantial, as seen with previous Chinese technology rip-and-replace efforts.

The situation facing Zoox and other autonomous vehicle makers highlights a fundamental tension in the U.S. technology ecosystem: the desire for low-cost, high-performance components versus the need to protect critical infrastructure from potential foreign government access. As autonomous vehicles move from testing to widespread deployment, this tension will likely intensify, forcing regulators and industry leaders to make difficult choices about supply chain security.