US State Department Sanctions Five Chinese Entities Over Ex-Google Engineer's AI Trade Secrets Theft

The US State Department announced on October 19, 2026, that it is imposing sanctions under the Protecting American Intellectual Property Act (PAIPA) on five Chinese entities suspected of stealing trade secrets from American companies. The targets include Shanghai Zhisuan Technology, founded by former Google software engineer Ding Linwei, venture capital firm MiraclePlus, and three related entities managed by MiraclePlus.

The sanctions stem from the criminal conviction of Ding Linwei. Ding worked at Google from 2019 to 2023 as a software engineer focusing on supercomputing data centers. Indictments revealed that he secretly uploaded more than 1,000 unique Google files to his personal cloud account between May 2022 and May 2023. These files contained confidential code related to Google’s AI supercomputing infrastructure, including technical details of Tensor Processing Units (TPUs), Graphics Processing Unit (GPU) systems, and networking components used to train large-scale AI models.

This technology is strategically critical for China's AI industry, particularly for efficiently coordinating thousands of chips for large-model training amidst export controls on high-performance hardware. In January 2026, a federal jury in San Francisco convicted Ding on seven counts of economic espionage and seven counts of trade secret theft. However, in August, Federal District Judge Vince Chhabria overturned the economic espionage convictions due to insufficient evidence that Ding intended to benefit the Chinese government, while upholding the trade secret theft convictions. On September 1, Ding was sentenced to 12 months minus one day in prison and ordered to pay approximately $198,000 in restitution.