US sanctions MiraclePlus (ex-YC China) and Linwei Ding’s startup Zhisuan over stolen Google AI chip secrets, first PAIPA action against China
Partly confirmed
Status
- Claim
Partly confirmed
- Our reporting
- Medium confidence
- Importance
- 3 of 5
- Last verified
- 20 October 2026
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Key facts
- Announced Oct 19, 2026 by the State Department under PAIPA (in force since Jan 2023); per Startup Fortune it is the second PAIPA use and the first against China, after a Feb 2026 action against Russian exploit broker Operation Zero
- Entities (Startup Fortune): Shanghai Zhisuan Technology, MiraclePlus, Beijing Qiji Chuangtan Phase I and Phase II, and an unnamed Phase I subsidiary; Seoul Economic Daily describes them as Zhisuan, MiraclePlus, two MiraclePlus funds and a management entity
- Measures: asset freezes, transaction bans with US persons, limits on credit, foreign-exchange and banking transactions
- State Department allegation (as reported): MiraclePlus seeded Zhisuan for an ownership stake and helped it market itself on Ding’s Google background and claimed ability to replicate Google’s AI infrastructure
- Underlying case: Ding (hired by Google in 2019, arrested March 2024) uploaded confidential AI supercomputing files, including TPU designs, to a personal cloud account (May 2022 – April 2023). Per Startup Fortune, a jury convicted him in January 2026, a judge acquitted him of the economic-espionage counts on Aug 20, and on Sept 1 he was sentenced on the remaining trade-secret counts to 12 months minus a day and ~$198,000 restitution; reports differ in details
- Secondary sources only: we could not open Bloomberg’s report or a State Department release
What happened
The State Department used the rarely applied PAIPA to sanction not only the startup built by a convicted former Google engineer but also the venture firm that funded it. MiraclePlus is one of China’s best-known startup accelerators, spun out of Y Combinator’s short-lived China unit in 2019. The same day, DHS ordered federal civilian agencies to remove DeepSeek.
Why it matters
Sanctioning an investor, not just the thief, widens the cost of AI trade-secret theft to the Chinese funding ecosystem, as US agencies push harder on AI-related security (DeepSeek ban, distillation warnings). Details of the court case vary between reports; confidence medium.
Sources
3 sources from 3 sites. Numbers match the chips in the text.
3 sources: 3 press
Press
- Bloomberg: US sanctions China’s Y Combinator in Google AI secrets case (Oct 20; not fetchable to us)bloomberg.com, press
- Startup Fortune: US sanctions Chinese Y Combinator successor MiraclePlus over Google trade secretsstartupfortune.com, press
- Seoul Economic Daily: US sanctions five Chinese firms over stolen Google AI secretsen.sedaily.com, press
Changes
- Filed (Techmeme)