Hesai Technology, a Shanghai-based lidar manufacturer that the U.S. Department of Defense blacklisted as a Chinese military entity in 2024, is deepening its foothold in American autonomous systems through an expanded partnership with Nvidia $NVDA. The deal gives automakers the ability to incorporate Hesai sensors into Nvidia's DRIVE Hyperion autonomous vehicle architecture as one of several available hardware choices.
Rather than responding to detailed questions about the arrangement, Nvidia issued a statement describing its DRIVE Hyperion platform as an open architecture that allows automakers to pick hardware suited to their markets, in compliance with applicable regulations. The partnership was announced at the Consumer Electronics Show in January.
According to the company, Hesai commands about a third of worldwide automotive lidar sales, and its hardware has made inroads across American infrastructure — from the robotaxi fleets of Amazon $AMZN's Zoox to autonomous trucking companies Waabi and Kodiak, as well as passenger screening areas at New York's John F. Kennedy International Airport. Hesai says it has cut the price of its lidar units from more than $10,000 each to under $200.
Being listed on the Pentagon blacklist blocks Hesai from winning federal procurement contracts, yet American companies face no legal restriction on purchasing or deploying its sensors in civilian applications. A federal lawsuit Hesai filed challenging the designation was decided against the company in 2025; the appeal remains ongoing.
Security researchers and lawmakers say the commercial exemption leaves critical infrastructure exposed. Craig Singleton, a senior director at the Foundation for Defense of Democracies, warned that the granular mapping data lidar collects could be turned against American infrastructure by a foreign adversary, and noted that Chinese statute gives Beijing the authority to demand that companies like Hesai hand over whatever data they possess. Duke $DUK University professor Miroslav Pajic, whose research focuses on sensor security, showed CNBC demonstrations in which compromised lidar hardware produced entirely fictitious objects in its field of view, and in separate tests caused real physical obstacles to vanish from the sensor's output.
Hesai co-founder and CEO David Li rejected both claims. Li argued that the hardware is incapable of retaining information because it has no onboard storage, and that whatever data the sensors feed into a partner's system belongs entirely to that partner, beyond Hesai's reach. Li added that making the firmware publicly available allows anyone to scrutinize it, and that vehicles running autonomous software rely on cameras and radar alongside lidar, so a single-sensor failure would not leave the system blind.
The question of whether Chinese-made components should be embedded in U.S. autonomous systems is drawing comparisons to earlier technology disputes. Rivian $RIVN CEO RJ Scaringe said Chinese firms dominate the affordable lidar market and that the company is exploring ways to manufacture sensors domestically, potentially through a joint venture with a Chinese firm.
Rep. John Moolenaar, chairman of the House Select Committee on the Chinese Communist Party, said Hesai's technical explanations have not allayed his concerns, pointing to what he described as a documented pattern of hidden access points in Chinese-made technology; earlier this year he put forward a bill that would prohibit Chinese vehicles from operating on American roads.