China Reviews Palo Alto Networks Under the Process That Barred Micron in 2023

China's Cyberspace Administration said Thursday that it had opened a cybersecurity review of Palo Alto Networks products sold in China to protect critical information infrastructure. The Cybersecurity Review Office is conducting the examination under China's Cybersecurity Review Measures, according to the Global Times. The action follows a January directive ordering Chinese organizations to identify products from named American and Israeli cybersecurity suppliers and replace them with domestic technology by the first half of 2026.

What the regulator left out

The regulator did not identify the products, describe any alleged vulnerabilities or say what action Palo Alto Networks could face, Reuters reported. It also did not connect the review to restrictions that China's commerce ministry announced Wednesday on American companies and drone exports bound for the United States.

Palo Alto Networks did not immediately respond to a request for comment. The Santa Clara, California, company does not separately disclose its revenue or market share in China, instead including the country in its Asia-Pacific and Japan region. A TD Cowen research note reported by TipRanks on Jan. 14, 2026, put China at 1% to 2% of sales for each of Palo Alto Networks, Fortinet and Check Point. The note said it was unclear whether the January directive amounted to a formal ban. Its shares traded as much as 4.2% lower during Thursday's premarket session before paring the loss, Bloomberg reported.

The December notice and January directive

A securities regulatory bureau notice dated Dec. 19, 2025, said, “Recent work has found that cybersecurity products from Palo Alto Networks, a company with a US-Western intelligence background, have security issues.” The notice, seen by Bloomberg News, was reported in January alongside the broader government directive.

The January order named Palo Alto Networks, Fortinet and Check Point among more than a dozen American and Israeli suppliers. It accused the companies of ties to intelligence agencies but provided no evidence. In a Jan. 16, 2026, report, SecurityWeek quoted a Check Point representative for Asia-Pacific as saying that the company had received no government notification and knew of no restriction on its operations in China.

The replacement market

SecurityWeek reported on Jan. 16, 2026, that China had more than 5,000 cybersecurity companies, citing an analysis by Natto Thoughts. The analysis identified Qihoo 360, Topsec, Sangfor, NSFOCUS, Venustech and Qi An Xin among the leading vendors.

The same analysis found that each of China's 20 largest cybersecurity companies had some connection to the government. Their average revenue grew 5.4% in 2024 from the prior year, while profit pressure across the sector led to staff cuts.

The Micron precedent

The CAC opened a cybersecurity review of Micron in late March 2023 and announced on May 21, 2023, that the chipmaker had failed it. The agency cited “relatively serious” cybersecurity risks and told operators of critical information infrastructure to stop buying Micron products, without identifying the products or the risks.

Jefferies analysts including Edison Lee expected the scope to contain the damage. “We believe this ban is narrowly focused, as it applies to only CII operators,” they wrote in May 2023. “Therefore, the ultimate impact on Micron will be quite limited.”

Micron told the Securities and Exchange Commission in June 2023 that about half of its China-based revenue was at risk. Customers in mainland China and Hong Kong accounted for one-quarter of its global revenue at the time. Reuters reported in October that Micron had stopped supplying server chips to data centres in China after the business failed to recover from the ban, though it continued selling chips to some Chinese customers, including in automotive and mobile phones.

Holden Triplett, founder of Trenchcoat Advisors and a former FBI counterintelligence official in Beijing, rejected the stated rationale for the Micron decision. “No one should understand this decision by CAC as anything but retaliation for the US's export controls on semiconductors,” he said in May 2023. “These are political actions pure and simple, and any business could be the next one to be made an example of.”

China Considers Adding AI Model Weights and Chip Designs to Export List

China's Ministry of Commerce is consulting Alibaba, ByteDance, Zhipu and other domestic AI and chip companies on possible controls affecting model weights, key data used for training and chip designs,

The Implicator

OpenAI and Anthropic Lobby Washington to Restrict Chinese Open-Weight AI

OpenAI and Anthropic have lobbied Washington regulators to restrict Chinese open-weight AI models, five people close to the discussions told The New York Times on Saturday. According to the same repor

The Implicator

The Anthropic Shutdown Confirmed Europe's Fear of Depending on US Tech

Anthropic disabled its two most capable artificial-intelligence models, Fable 5 and Mythos 5, for every customer worldwide late on June 12, after the US Commerce Department ordered the company to bloc

The Implicator

Marcus Schuler

San Francisco

Editor-in-Chief and founder of Implicator.ai. Former ARD correspondent and senior broadcast journalist with 10+ years covering tech. Writes daily briefings on policy and market developments. Based in San Francisco. E-mail: editor@implicator.ai