The State Department has sanctioned five China-based entities connected to former Google engineer Linwei Ding, including his startup Shanghai Zhisuan Technology and MiraclePlus, the Beijing venture firm that gave Zhisuan seed capital in exchange for an ownership stake. The designations, announced October 19, were made under the Protecting American Intellectual Property Act (PAIPA).
The other three entities are two MiraclePlus-managed venture funds, known as Phase I and Phase II, and an enterprise management partnership wholly owned by the Phase I fund. The department designated them as owned or controlled by MiraclePlus.
Spokesman Tommy Pigott said the action followed a Justice Department and FBI investigation of Ding. A federal jury convicted Ding on January 29 of seven counts of theft of trade secrets for stealing “thousands of pages of confidential information containing Google’s trade secrets related to super intelligence (SI) technology,” Pigott said.
According to the department’s fact sheet, Ding established Zhisuan in 2023 and marketed it as capable of developing a software platform to accelerate machine learning workloads, including training large models on supercomputing chips. He applied to MiraclePlus’s startup incubation program, touting his knowledge of Google’s internal systems and claiming Zhisuan could replicate Google’s infrastructure technology.
MiraclePlus invests mainly in Chinese technology startups and runs two startup camps a year where selected companies can pitch other investors. Ding used that stage to promote Zhisuan, citing his connection to Google technology and his ability to replicate it “to fit China’s national conditions,” the fact sheet says.
The department found that Zhisuan “knowingly engaged in, or benefitted from, significant theft of trade secrets of United States persons.” It found that MiraclePlus provided significant financial, material or technological support for the theft.
The Treasury Department’s Office of Foreign Assets Control added all five entities to its Non-SDN Menu-Based Sanctions List. Their property and interests in property are blocked, and transactions with them are prohibited except for the importation of goods. US financial institutions may not lend them more than $10 million in any 12-month period, and US persons may not invest in or buy significant amounts of their equity or debt.
PAIPA, signed into law in January 2023, requires sanctions on foreign persons that engage in or benefit from significant theft of US trade secrets occurring on or after January 5, 2023.
In August, a federal judge vacated seven economic espionage convictions that the same jury had returned, finding insufficient evidence that Ding acted for the benefit of the Chinese government. In September, the judge sentenced him to twelve months minus a day in prison on the theft counts.
An OFAC general license allows transactions needed to wind down dealings with MiraclePlus and the three linked partnerships until 12:01 a.m. Eastern Standard Time on January 19, 2027. Zhisuan is not covered by that license.
Sources: State Department, OFAC
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By the Control Plane Editorial Team