A former Google engineer has been indicted for stealing trade secrets to benefit two companies in China. This case adds to a series of actions by US authorities to prevent the outflow of critical technological information to China.
A federal jury in San Francisco charged the 38-year-old Chinese national, Linwei Ding, with four counts of theft of trade secrets.
The statement of indictment stated that the stolen trade secrets were critical to Googleâs AI prowess, involving the specialized hardware and software that power the companyâs supercomputing centers.
âThe trade secrets contain detailed information about the architecture and functionality of GPU and TPU chips and systems, the software that allows the chips to communicate and execute tasks, and the software that orchestrates thousands of chips into a supercomputer capable of executing at the cutting edge of machine learning and AI technology,â said the statement from the US District Court for the Northern District of California. Â Â Â
The US struggle to limit IP theft
Ding uploaded 500 files, most of which contained trade secrets, to the cloud using a multistep scheme to evade detection. According to the indictment, Ding was paid $14,800 per month by a Chinese tech firm while he was still working at Google, according to the indictment.
This follows another similar incident in May 2023, when a former Apple engineer was indicted on five counts related to attempts to steal technology for China, Russia, and Iran. The case focused on technologies linked to autonomous systems, including self-driving cars, with the engineer allegedly fleeing to China after the theft.
In February 2023, the Biden administration established the Disruptive Technology Strike Force in response to such security concerns. This task force is aimed at preventing the transfer of advanced technologies to nations like China and Russia, which could pose a threat to the US national security.
Significantly, last month Deputy Attorney General Lisa Monaco said that the strike force would focus on violations related to the use or transfer of AI technology, according to a Bloomberg report.
Intellectual property theft has been a significant issue in the trade tensions between the US and China, particularly intensifying during Donald Trump’s presidency. A 2017 report by The New York Times estimated that such theft could be costing the US as much as $600 billion annually, with the majority attributed to China.
Blocking advanced technology
Besides cracking down on IP theft, the US government has been tightening restrictions on the export of advanced technologies to China, particularly impacting companies like Nvidia and AMD.
However, in August 2023, the Chinese technology giant Huawei launched a new smartphone equipped with an advanced in-house chip design, surpassing the technological benchmarks that the US had aimed to enforce to limit China’s technological advancements.
In October 2023, the Bureau of Industry and Security, under the Department of Commerce, introduced updated rules to reinforce export controls on advanced semiconductors and related manufacturing equipment, as well as items used in supercomputing, to address national security concerns.
A separate Bloomberg report also suggests that the US government is actively lobbying allies, including the Netherlands, Germany, South Korea, and Japan, to tighten controls on semiconductor technology exports to China.
The challenge for US tech companies
US restrictions have prompted major tech companies to make changes to their business plans. For instance, semiconductor companies like Nvidia and AMD are designing lower-performance chips specifically for China that would meet the US criteria.
However, even this is proving to be difficult as AMDâs latest China-specific chips were deemed too powerful to be sold. The regulations had also forced Nvidia to pause its operations and redesign its offering to China, risking a dent in its operations and earnings from the region.
Some analysts are skeptical about the long-term effectiveness of such export controls on China, suggesting that they could inadvertently propel the latter to accelerate its own tech capabilities or might lead international companies to seek loopholes.