DJI, the largest commercial drone maker globally, was put on the investment blocklist by the US government starting from Tuesday, December 21, 2021. This means Americans and American entities can no longer buy or sell DJI shares.

What will this news mean for the company's customers and the commercial drone industry? Will you still be able to buy and import DJI drones?

No More American Investment

burning hundred dollar bills

Aside from DJI, Washington DC's latest move affects seven other major Chinese companies deemed by the US Treasury Department as part of the Chinese military-industrial complex. According to their press release, these companies take an active role in systemic surveillance and abuses against Uyghur Muslims and other minorities.

"Today's action highlights how private firms in China's defense and surveillance technology sectors are actively cooperating with the government's efforts to repress members of ethnic and religious minority groups," said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. "Treasury remains committed to ensuring that the US financial system and American investors are not supporting these activities."

Some of DJI's lead investors include Sequoia Capital China and Kleiner Perkins. Since Sequoia Capital China is a China-registered company based in Beijing, they aren't affected by the sanction. However, this move would impact Silicon Valley-based investment giant Kleiner Perkins.

Related: Drone Restrictions: What Are They and What Do They Mean?

An Expansion of American Sanctions

the white house

In 2020, the US added DJI and several other Chinese tech companies to the US Department of Commerce's Entity List, preventing them from purchasing American products or technologies without a license.

This move ensures that American technology does not help build the military of an increasingly belligerent adversary. According to former Commerce Secretary Wilbur Ross, these restrictions are necessary measures so that China cannot leverage advanced US tech to support its military activities.

The US Department of Commerce press release said that items required to produce advanced 10nm semiconductors and smaller are presumably denied for export. It could also mean that companies on this list cannot purchase chips that feature this technology.

Developmental Impact

a parked DJI drone

DJI's addition to the entity list has affected their operations and development. After all, their products use products and services from several American companies. These include Amazon Web Services, Texas Instruments, Intel, FLIR, Apple, and Google.

This further expansion, where the company can't use American money for any purpose, will severely limit its future growth.

New Technologies

However, despite the 2020 ban, DJI went ahead and continued with new product releases. In the latter half of 2021, the company released the latest version of its popular Mavic Series drone. They also created the new and ground-breaking DJI Ronin 4D cinematic camera.

Since the company hasn't made any further announcements, we can only look ahead and anticipate what 2022 and beyond has in store for their drone and camera products.

Dropping Market Share

inverted crashed drone on the pavement
Image Credit: Bill Morrow/Flickr

According to research firm DroneAnalyst, one significant change to the drone market was DJI's commercial market share drop. In 2020, it cornered 69% of the market. But in 2021, this fell to 54%. While DJI still has the majority, this drastic 15-point drop could be a harbinger of bad news.

That's because this drop is accompanied by significant growth in drone program expenditure—meaning DJI is losing out on sales against its competitors.

Limited Sales

As long as these sanctions aren't lifted, DJI could lose future sales, especially in the US and its allies. That's because companies are wary of investing thousands of dollars on DJI products, knowing that the government could cut their support anytime.

There's also the suspicion that DJI secretly gathers data on their customers. And with the Chinese law that requires Chinese companies to turn over information at government demand, this further increases concerns over privacy and data security.

Related: How to Prevent Drones From Infringing on Your Privacy

Can You Still Buy DJI Drones?

Despite the adversity DJI currently faces, they're still the undisputed leader in consumer drones, holding over 94% of the market. As long as the US doesn't completely ban the company as they did with Huawei, the general public can expect the availability of the company's Mavic, FPV, and Phantom drones, as well as its Osmo and RoboMaster products.

Since these drones aren't typically used for vital public services or sensitive security applications, the government has little reason to ban them. So, if you want to buy a DJI drone for personal or creative use, you can still do so in the foreseeable future.