Webpack not excluding node_modules

Try use absolute path:

exclude:path.resolve(__dirname, "node_modules")

From your config file, it seems like you're only excluding node_modules from being parsed with babel-loader, but not from being bundled.

In order to exclude node_modules and native node libraries from bundling, you need to:

1. Add target: 'node' to your webpack.config.js. This will define NodeJs as the environment in which the bundle should run. For webpack, it changes the chunk loading behavior, available external modules and generated code style (ie. uses require() for NodeJs) it uses during bundling.

2. Set the externalPresets of node to true. As of Webpack@5, This configuration will exclude native node modules (path, fs, etc.) from being bundled.

3. Use webpack-node-externals in order to exclude other node_modules.

So your result config file should look like:

var nodeExternals = require('webpack-node-externals');
...
module.exports = {
    ...
    target: 'node', // use require() & use NodeJs CommonJS style
    externals: [nodeExternals()], // in order to ignore all modules in node_modules folder
    externalsPresets: {
        node: true // in order to ignore built-in modules like path, fs, etc. 
    },
    ...
};

If you ran into this issue when using TypeScript, you may need to add skipLibCheck: true in your tsconfig.json file.