US Sanctions MiraclePlus Over Google AI Secrets Theft

The US has sanctioned five Chinese entities over the theft of artificial intelligence trade secrets from Google. They include the start-up founded by former Google engineer Linwei Ding and the venture capital firm that funded it. The State Department announced the designations on 19 October under the Protecting American Intellectual Property Act (PAIPA), a 2023 law aimed at foreign beneficiaries of trade-secret theft. The Information reported the move on Tuesday morning.

The action goes beyond the individual convicted in court and reaches the money behind him. As well as Ding’s company, Shanghai Zhisuan Technology, Washington has targeted MiraclePlus, the Beijing start-up incubator that invested in it, and three of its funds. For US banks, investors and anyone doing business with Chinese tech start-ups, that is a sign that backing a company built on stolen technology now carries direct sanctions risk.

In brief

The US has sanctioned Shanghai Zhisuan, set up by ex-Google engineer Linwei Ding, plus MiraclePlus and three MiraclePlus funds, under PAIPA.
The measures block the entities’ property, cap US bank lending to them and bar US persons from buying significant amounts of their equity or debt.
Ding was convicted by a jury of stealing Google’s AI trade secrets; none of the sanctioned entities has publicly responded.

What the State Department says happened

According to the State Department, Zhisuan is “a China-based entity established by Linwei Ding in 2023”. It “was marketed as capable of developing a software platform that could accelerate machine learning workloads, including training large super intelligence (SI) models powered by supercomputing chips”. The department says Ding applied on Zhisuan’s behalf to MiraclePlus, “touting his experience with and knowledge of Google’s technology and internal systems and claiming that Zhisuan could replicate Google’s SI infrastructure technology”.

MiraclePlus, formally Qiji Chuangtan Beijing Investment Management, is described by the department as a venture capital firm that invests mainly in Chinese tech start-ups and runs two start-up camps a year. “MiraclePlus gave seed capital in exchange for an ownership stake in Zhisuan,” the fact sheet says. It adds that Ding used MiraclePlus’s stage to tout “his ability to replicate its technology to fit China’s national conditions”.

The three other targets are MiraclePlus vehicles. State says Beijing Qiji Chuangtan Phase I Venture Capital Center and Phase II Venture Capital Center are funds managed by MiraclePlus. Beijing Qiji Chuangtan Zhiyuan Enterprise Management Center is wholly owned by Phase I.

The legal findings differ by target. State determined that Zhisuan “knowingly engaged in, or benefitted from, significant theft of trade secrets of United States persons” that occurred on or after 5 January 2023. It found that MiraclePlus provided significant financial, material or technological support for that theft. The three funds were designated because MiraclePlus owns or controls them.

What the sanctions do

PAIPA was signed into law in January 2023, according to State, and “mandates sanctions against certain foreign persons who have engaged in, or benefited from, significant theft of trade secrets”. The department applied five measures from Section 2(b)(1) of the law. The Treasury’s Office of Foreign Assets Control (OFAC) added all five entities to its Non-SDN Menu-Based Sanctions List, which spells out each measure.

Measure	What OFAC’s listing says
Blocking	Property blocked; transactions banned, except importing goods
US bank loans	Capped at $10m in any 12 months
Foreign exchange	US-linked FX deals involving them banned
Bank transfers	US-linked transfers involving them banned
Investment	US persons barred from significant equity or debt purchases

Source: OFAC recent actions, 19 October 2026.

Taken together, the measures largely shut the five entities out of the US financial system, though imports of goods from them are exempt from the blocking measure. The investment ban is aimed squarely at the funds, since it bars US persons from buying significant stakes or debt in them. The department added a standard line that “the ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior”, and pointed to its delisting guidance.

The court case behind the sanctions

The designations follow a criminal case that reached a verdict earlier this year. In January, a federal jury in San Francisco convicted Ding on seven counts of economic espionage and seven counts of theft of trade secrets, the Justice Department said. According to the evidence at trial, he stole more than two thousand pages of confidential information about the hardware and software behind Google’s AI supercomputers between around May 2022 and April 2023, uploading it to his personal Google Cloud account.

The DOJ said the material covered Google’s custom Tensor Processing Unit chips, its GPU systems and the software that ties thousands of chips into a supercomputer. “In multiple statements to potential investors, Ding claimed that he could build an AI supercomputer by copying and modifying Google’s technology,” the department said.

The verdict did not survive in full, however. US District Judge Vince Chhabria threw out the seven economic-espionage counts in August, KQED reported. He found the evidence “insufficient for a rational jury to conclude beyond a reasonable doubt that Ding knew or intended” that his actions would benefit the Chinese government. The trade-secret theft convictions stood, and The Information reported that Ding was sentenced to prison last month.

That makes the timing notable. Ding’s own lawyers told the court in a sentencing memo that “Zhisuan is defunct”, according to KQED, which means the measures may bite hardest on MiraclePlus and its funds. No response from Zhisuan, MiraclePlus or the Chinese government was found at the time of writing.

Our read

This is TSN’s analysis. PAIPA has been on the books since 2023, and this action shows the State Department is now willing to use it to reach the investors behind alleged IP theft, not just the people who carried it out. For compliance teams, the lesson is that screening of China-linked venture funds and their portfolio companies now needs to cover PAIPA listings as well as the better-known sanctions lists. The open question is whether this is a one-off tied to a high-profile conviction or the first of more designations against backers of AI start-ups.