Washington invokes sanctions legislation to target five Chinese businesses linked to the theft of Google’s artificial intelligence secrets.
The United States has taken the unusual step of using sanctions legislation to tackle the theft of Google’s artificial intelligence secrets, targeting five Chinese technology and investment businesses associated with stolen intellectual property (IP) . The decision offers a fascinating alternative to traditional criminal prosecutions and civil litigation, allowing Washington to restrict the financing and international business activities of companies linked to IP theft without first having to secure criminal convictions against them.
The US Treasury’s Office of Foreign Assets Control (OFAC) announced the measures yesterday (19 October) under the Protecting American Intellectual Property Act 2022 (PAIPA), with the targets including Shanghai Zhisuan Technology, founded by former Google engineer Linwei Ding, and Beijing-based investment business MiraclePlus, together with three associated investment entities.
Ding joined Google as a software engineer in 2019, gaining access to confidential information the infrastructure supporting its advanced AI systems.
Between May 2022 and April 2023, he stole more than 2,000 pages of confidential material, uploading files from Google’s network to his personal cloud account. The information concerned specialised processors, networking equipment and software used to connect thousands of computer chips into powerful systems capable of training and operating AI models. At the same time, he secretly developed relationships with Chinese technology businesses and, by early 2023, was setting up his own AI company in China and presenting himself as its chief executive.
According to evidence presented at his trial, he told prospective investors that he could build an AI supercomputer by copying and modifying Google’s technology. He also applied to a Chinese government- programme intended to attract technical expertise.
Following an 11-day trial in San Francisco, in January 2026 a federal jury convicted Ding of seven counts of economic espionage and seven counts of theft of trade secrets. However, US District Judge Vince Chhabria overturned the economic espionage convictions in August, finding insufficient evidence that Ding intended or knew his actions would benefit the Chinese government. His trade-secret theft convictions still stand and, on 1 September, Judge Chhabria sentenced him to just under a year in prison, ordered him to pay more than $198,000 in restitution to Google and imposed a $2,500 fine.
PAIPA allows Washington to impose economic restrictions on foreign parties involved in serious theft of US trade secrets, particularly where national security or economic interests are threatened. And, unlike ordinary IP litigation, which generally involves injunctions or damages, sanctions allow the government to restrict commercial and financial dealings without requiring the IP owner to bring a civil claim.
The five businesses have been placed on a US sanctions list, with their assets subject to US law frozen and US financial institutions prohibited from making loans exceeding $10 million over a 12-month period. They also face restrictions on banking transactions, foreign-exchange dealings and investment from the US. OFAC has, however, permitted certain transactions to proceed, including arrangements for companies to wind down existing business with those affected.
The case illustrates how the US can pursue businesses associated with stolen technology even when criminal proceedings against those businesses have not been brought. And with AI infrastructure increasingly regarded as a matter of national security, IP theft can now have consequences well beyond the courtroom.
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