Imposing Sanctions to Protect Americans from Intellectual Property Theft Fact Sheet

Today, the Department of State announced the designations of five entities under the Protecting American Intellectual Property Act (PAIPA) in connection with theft of trade secrets from U.S. persons.

Shanghai Zhisuan Technology Co Ltd (Zhisuan), a China-based entity established by Linwei Ding in 2023, 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. Ding applied on behalf of Zhisuan to a China-based startup incubation program known as 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.

Qiji Chuangtan Beijing Investment Management Co Ltd (MiraclePlus) is a China-based venture capital firm that invests primarily in Chinese tech startups and holds two startup camps a year, in which select companies are able to solicit additional funding from other investors. MiraclePlus gave seed capital in exchange for an ownership stake in Zhisuan. Ding, using the stage provided by MiraclePlus to present his company, Zhisuan, touted his connection to Google technology and his ability to replicate its technology to fit China's national conditions. Beijing Qiji Chuangtan Phase I Venture Capital Center Limited Partnership (Phase I), a China-based entity established in 2020, is a venture capital fund managed by MiraclePlus.

Beijing Qiji Chuangtan Phase II Venture Capital Center Limited Partnership (Phase II), a China-based entity established in 2022, is a venture capital fund managed by MiraclePlus.

Beijing Qiji Chuangtan Zhiyuan Enterprise Management Center Limited Partnership (Zhiyuan Enterprise), a China-based entity, is wholly owned by Phase I, an entity owned or controlled by MiraclePlus.

Zhisuan is a foreign person that has knowingly engaged in, or benefitted from, significant theft of trade secrets of United States persons, which occurred on or after January 5, 2023, and is reasonably likely to result in, or has materially contributed to, a significant threat to the national security, foreign policy, or economic health or financial stability of the United States.

MiraclePlus is a foreign person that has provided significant financial, material, or technological support for, or goods or services in support of or to benefit significantly from, theft of trade secrets of U.S. persons. Phase I, Phase II, and Zhiyuan Enterprise are entities that are owned or controlled by, or have acted or purported to act for or on behalf of, directly or indirectly, MiraclePlus.

Sanctions Implications

Signed into law in January 2023, PAIPA is a statutory authority that mandates sanctions against certain foreign persons who have engaged in, or benefited from, significant theft of trade secrets of U.S. persons, as well as associated persons.

As a result of the designations under PAIPA, the sanctions specified in Section 2(b)(1)(A), (D), (H), (I), and (J) of the statute apply with respect to Shanghai Zhisuan Technology Co Ltd (Zhisuan) Qiji Chuangtan Beijing Investment Management Co Ltd (MiraclePlus), Beijing Qiji Chuangtan Phase I Venture Capital Center Limited Partnership (Phase I), Beijing Qiji Chuangtan Phase II Venture Capital Center Limited Partnership (Phase II), and Beijing Qiji Chuangtan Zhiyuan Enterprise Management Center Limited Partnership (Zhiyuan Enterprise).

The power and integrity of U.S. sanctions programs derive not only from the U.S. government's ability to designate and add persons to sanctions lists but also from its willingness to remove persons from such lists consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior.

Persons seeking removal of sanctions may refer to the Department of State's Delisting Guidance page.

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