China Warns Of Retaliation After US Sanctions Five Firms Linked To Ex-Google Engineer

China has condemned US sanctions against five Chinese entities linked to former Google engineer Linwei Ding, who was convicted of stealing artificial intelligence (AI) trade secrets, warning that Beijing would take “necessary measures” in response. The dispute has escalated as Chinese authorities reject Washington’s allegations and defend the country’s technological progress.

China’s Commerce Ministry said the sanctions “severely harm the legitimate rights and interests” of Chinese businesses and urged the Trump administration to reverse its decision. Beijing maintained that its AI capabilities were built through independent research, sustained investment and international cooperation, not stolen intellectual property.

The US State Department announced the measures on October 19 under the Protecting American Intellectual Property Act. The five entities are Shanghai Zhisuan Technology, venture capital firm Qiji Chuangtan Beijing Investment Management, known as MiraclePlus, and three affiliated entities: Beijing Qiji Chuangtan Phase I Venture Capital Center, Beijing Qiji Chuangtan Phase II Venture Capital Center and Beijing Qiji Chuangtan Zhiyuan Enterprise Management Center.

Washington accused Zhisuan, founded by Ding in 2023, of benefiting from significant theft of American trade secrets. The startup was marketed as developing software to accelerate machine-learning workloads, including training large AI models using advanced computing chips.

MiraclePlus, which runs a startup incubation programme, was accused of providing financial support connected to the alleged theft. However, MiraclePlus denied investing in Zhisuan, said the sanctions came without prior warning and stated that it was seeking their removal through discussions with relevant parties.

Ding, who joined Google in 2019, was accused of stealing thousands of pages of confidential information relating to the company’s AI technology. He was charged in 2024 and convicted in January 2026 on seven counts of trade-secret theft and seven counts of economic espionage.

A federal judge subsequently dismissed the economic espionage convictions, ruling that the evidence was insufficient to establish that Ding knew his actions would benefit the Chinese government. His trade-secret theft convictions remained intact, and he was sentenced to 12 months in prison. The US Justice Department is appealing the dismissal of the espionage charges.