US sanctions five Chinese firms tied to ex-Google engineer accused of AI trade secrets theft

On October 19, 2026, the U.S. State Department sanctioned five Chinese entities linked to former Google software engineer Ding Linwei, who was convicted of stealing over 1,000 AI trade secret documents. The penalties target Ding's startup, Shanghai Zhisuan Technology, alongside incubator MiraclePlus and three affiliates that provided $700,000 in seed funding. China's Commerce Ministry condemned the measures as egregious while rejecting claims of trade secret theft.

U.S. sanctions on Chinese entities

• ▪The sanctioned Chinese entities include startup Shanghai Zhisuan Technology Co., venture capital firm MiraclePlus, and three MiraclePlus-affiliated entities placed on the Treasury Department's Non-SDN Menu-Based Sanctions List.
• ▪On October 19, 2026, the U.S. State Department imposed sanctions under the Protecting American Intellectual Property Act on five Chinese entities linked to former Google software engineer Ding Linwei.
• ▪The U.S. State Department determined that Shanghai Zhisuan Technology knowingly engaged in or benefited from significant theft of U.S. trade secrets occurring on or after January 5, 2023.
• ▪The U.S. sanctions block the five Chinese companies' U.S.-based property, limit access to U.S. capital markets, and bar Americans from purchasing large amounts of their equity or debt instruments.

State Department assessment of trade secret theft

• ▪The U.S. State Department determined that the theft of trade secrets in the Google case poses a serious threat to U.S. economic, foreign policy, and national security interests.
• ▪In an October 19, 2026 statement, U.S. State Department spokesperson Tommy Pigott stated that trade secret theft involving sensitive technologies harms U.S. industry and costs billions of dollars annually.

MiraclePlus support for Shanghai Zhisuan

• ▪The U.S. State Department designated three MiraclePlus-linked entities—including two capital funds and Beijing Qiji Chuangtan Zhiyuan Enterprise Management Center Limited Partnership—for providing financial and material support to Shanghai Zhisuan Technology.
• ▪Chinese venture capital firm MiraclePlus, established by former Microsoft AI scientist Lu Qi as the successor to Y Combinator's Chinese program, provided $700,000 in seed financing to Shanghai Zhisuan Technology for a 7 percent stake.

China reaction to U.S. sanctions

• ▪China's Commerce Ministry stated that Chinese artificial intelligence developments stem from long-term basic research and independent technological innovation rather than trade secret theft.
• ▪On October 20, 2026, China's Commerce Ministry expressed firm opposition to the U.S. sanctions on the five Chinese companies, describing the act as egregious and warning that Beijing would take necessary measures.

Ding Linwei's Chinese technology ventures

• ▪According to court filings, Ding Linwei promoted Shanghai Zhisuan Technology on WeChat by stating the company aimed to replicate and upgrade Google's ten-thousand-card computational power platform for Chinese national conditions.
• ▪U.S. prosecutors stated that former Google software engineer Ding Linwei was affiliated with China-based artificial intelligence startup Beijing Rongshu Lianzhi Technology without disclosing the relationship to Google.

Ding Linwei conviction and sentencing

• ▪A federal judge sentenced Ding Linwei to 12 months in prison, two years of supervised release, a $2,500 fine, and nearly $190,000 in restitution to Google, while dismissing economic espionage charges.
• ▪Former Google software engineer Ding Linwei was convicted in January 2026 in San Francisco federal court on multiple counts of stealing AI trade secrets from Google.
• ▪The U.S. Justice Department is appealing the federal judge's dismissal of the economic espionage charges against Ding Linwei.
• ▪U.S. prosecutors alleged that between May 2022 and May 2023, Ding Linwei stole over 1,000 confidential Google documents describing Tensor Processing Unit AI chips and supercomputer platform software designs.