US sanctions Linwei Ding's AI startup and MiraclePlus over stolen Google secrets

What the State Department did

On 19 October 2026, the US Department of State sanctioned five entities connected to Linwei Ding, the former Google software engineer convicted earlier this year of stealing Google's AI trade secrets. The designations were made under the Protecting American Intellectual Property Act, or PAIPA, a 2023 law that requires sanctions on foreign companies and people that engage in or benefit from significant theft of US trade secrets.

Spokesman Tommy Pigott's statement says the action follows the Justice Department and FBI investigation of Ding, and that a federal jury convicted him on 29 January 2026 of seven counts of theft of trade secrets. It describes the stolen material as thousands of pages of confidential Google information on super intelligence (SI) technology, taken to benefit himself and China-based tech companies.

The targets are Ding's startup, Shanghai Zhisuan Technology, and the Chinese venture firm that funded it, MiraclePlus, along with three investment vehicles that MiraclePlus manages or owns. A separate State Department fact sheet lays out why each one was chosen.

Who the five entities are

The fact sheet names five China-based entities:

• Shanghai Zhisuan Technology Co Ltd (Zhisuan), set up by Ding in 2023 and marketed as able to build a software platform that speeds up machine-learning work, including training large SI models on supercomputing chips.
• Qiji Chuangtan Beijing Investment Management Co Ltd (MiraclePlus), a venture firm that runs two startup camps a year and gave Zhisuan seed capital in exchange for a stake.
• Beijing Qiji Chuangtan Phase I Venture Capital Center, a fund established in 2020 and managed by MiraclePlus.
• Beijing Qiji Chuangtan Phase II Venture Capital Center, a fund established in 2022 and managed by MiraclePlus.
• Beijing Qiji Chuangtan Zhiyuan Enterprise Management Center, wholly owned by the Phase I fund.

The Linwei Ding case behind it

The court record gives the detail behind the designations. In the August 2026 order in United States v. Ding, Judge Vince Chhabria wrote that Ding, then a software engineer in Google's AI program, uploaded a large number of AI-related trade-secret documents to his personal cloud account between May 2022 and April 2023, with an eye to starting a private AI supercomputing company in China. He took screenshots of the documents, pasted them into Apple Notes and uploaded them as PDFs, which the judge said made the activity harder for Google's security systems to detect.

The order says Ding applied to MiraclePlus, which it describes as a private early-stage accelerator, in May 2023 and was accepted that August. The deal came with 5 million yuan, about $700,000, from MiraclePlus's venture arm for a seven percent stake in Zhisuan, and a slot to pitch other investors at a MiraclePlus event in November 2023. The State Department says Ding used that stage to tout his link to Google technology and his ability to replicate it to fit China's national conditions.

The case did not end with the January verdict. On 20 August, Chhabria acquitted Ding of all seven economic-espionage counts, ruling that the evidence did not show he intended or knew, at the time of the uploads, that the theft would benefit the Chinese government. The trade-secret convictions stood. KQED reported that on 1 September he was sentenced to 12 months minus one day in prison, two years of supervised release, more than $189,000 in restitution and a $25,000 fine.

That history explains the wording of the State Department's release. It speaks only of theft of trade secrets and does not describe the case as espionage.

What PAIPA sanctions do

PAIPA lets the government choose from a menu of penalties set out in 50 U.S.C. 1709. The State Department says it applied the measures in section 2(b)(1)(A), (D), (H), (I) and (J) to all five entities.

In the statute's list, those letters cover blocking all of an entity's property and interests that are in the United States or held by a US person; barring US financial institutions from lending it more than $10 million in any 12-month period; banning the US government from buying its goods or services; and allowing the government to prohibit foreign-exchange transactions and bank transfers that involve the entity and fall under US jurisdiction.

The State Department did not choose the option of adding the companies to the Commerce Department's Entity List, which would restrict exports of US technology to them, and it did not name any individuals. The law ties these designations to theft that occurred on or after 5 January 2023, and the fact sheet says Zhisuan's conduct meets that test.

Why a defunct startup still matters

Ding's own lawyers told the court before sentencing that Zhisuan is defunct, according to KQED. That makes the action against the startup largely symbolic. The more consequential targets are MiraclePlus and its funds, an active investor in Chinese tech startups that now faces US blocking measures for having provided financial support to, or benefited from, the theft.

That is the signal for the wider AI industry. The fact sheet's reasoning is that a backer who funds a startup built on stolen US trade secrets can be sanctioned alongside it. It comes in a week of tougher US action on Chinese AI, after DHS ordered federal civilian agencies to remove DeepSeek products and tools built on them, and as China moves the other way with proposed export controls on 23 AI technologies.

Protecting model and infrastructure secrets has become a recurring theme in AI. OpenAI is dealing with a former engineer charged over a hidden recording device in its offices, and Apple and OpenAI are fighting in court over alleged trade-secret misuse. The Ding sanctions show the government using economic tools as well as prosecutions.

Limits and open questions

The release does not say how much of MiraclePlus's money or property is actually within US reach, so the practical effect of blocking is hard to judge from outside. Chinese venture funds rarely hold assets in the United States directly, though blocking can still cut them off from US investors, banks and dollar transactions.

It also does not explain why the State Department acted now, nearly nine months after the jury verdict and seven weeks after sentencing, or whether other investors in Zhisuan were considered. The court order mentions a Chinese consulting firm that helped Ding raise money and an earlier startup whose chief executive was to lead Zhisuan; neither is on the list.

There is a tension, too, between the sanctions and the court's findings. Chhabria described Ding's efforts as ham-fisted and noted that the people at trial doubted he could build anything close to Google's systems. The sanctions are about the theft and who funded it, not about whether the stolen material was put to effective use. The State Department release includes no response from the designated companies.

What it means for AI companies

For investors and accelerators, the action sets a clear risk: backing a founder who pitches access to a former employer's internal technology can bring US sanctions on the fund itself, not only on the founder. Due diligence on where a startup's technology came from now carries sanctions exposure as well as legal and reputational risk.

For AI companies, it is another tool on top of criminal cases. The State Department release says the goal of sanctions is to change behaviour rather than to punish, and that the listed entities can seek removal through its delisting process.