The State Department sanctioned five entities on Monday in connection with Linwei Ding, a Chinese national convicted of stealing Google $GOOGL trade secrets. The department acted under the Protecting American Intellectual Property Act.
The designated entities are Shanghai Zhisuan Technology Co Ltd, Qiji Chuangtan Beijing Investment Management Co Ltd (known as MiraclePlus), and three related entities. Those three are Beijing Qiji Chuangtan Phase I Venture Capital Center Limited Partnership, Beijing Qiji Chuangtan Phase II Venture Capital Center Limited Partnership and Beijing Qiji Chuangtan Zhiyuan Enterprise Management Center Limited Partnership.
The department said the designations follow an investigation of Ding by the Justice Department and the FBI. A federal jury convicted Ding on Jan. 29 of seven counts of theft of trade secrets. The department said he took confidential documents running to thousands of pages that held Google’s trade secrets on artificial intelligence supercomputing technology, intending to benefit himself and China-based tech companies.
Ding established Zhisuan in 2023, according to the department. The company was pitched as capable of building software that could speed up machine learning workloads, including the training of large models run on supercomputing chips.
Ding sought a place for Zhisuan in MiraclePlus' startup incubation program. He cited his experience with Google's technology and internal systems and claimed Zhisuan could replicate Google's infrastructure technology, the department said.
MiraclePlus is a China-based venture capital firm that invests primarily in Chinese tech startups. It gave seed capital to Zhisuan in exchange for an ownership stake, the department said. Phase I and Phase II are venture capital funds managed by MiraclePlus, and Zhiyuan Enterprise is wholly owned by Phase I.
The department said Zhisuan knowingly engaged in, or benefited from, significant theft of U.S. trade secrets that occurred on or after Jan. 5, 2023. It said MiraclePlus provided significant financial, material or technological support for such theft, and that the other three entities are owned or controlled by MiraclePlus or act on its behalf.
The sanctions lock down the entities' assets, limit the credit they can obtain from American financial institutions, bar some currency exchange and banking dealings, and curb U.S. investment in the firms, according to UPI.
"This theft of trade secrets is a serious threat to U.S. economic, foreign policy, and national security interests," State Department spokesman Thomas "Tommy" Pigott said in a statement.
Ding was sentenced in September to 12 months minus a day in prison for the theft convictions, according to UPI. A federal judge on Aug. 20 granted a post-trial motion to acquit Ding on seven economic espionage counts. The judge ruled that prosecutors failed to meet the reasonable-doubt standard in showing Ding was aware, as he took the files, that his conduct would aid the Chinese government, according to UPI. The theft convictions were left untouched, according to SCMP.