US sanctions "China's Y Combinator" over stolen Google AI secrets

What's the deal? The US State Department on October 19, 2026 sanctioned five Chinese entities over their ties to the theft of Google AI trade secrets. The targets include venture firm MiraclePlusDealroom has a profile for this one. Try Dealroom → (Qiji Chuangtan) — the successor to a Chinese program run by Silicon Valley accelerator Y Combinator, founded by former Microsoft AI scientist Lu Qi — along with two of its VC funds.

The backstory: The sanctions stem from the case of Linwei Ding, a former Google software engineer convicted in 2026 of stealing the company's AI trade secrets. A judge acquitted him on separate economic-espionage counts.

Who's affected? Ding founded Shanghai Zhisuan Technology Co., pitched as able to replicate Google's AI infrastructure, which received seed financing from MiraclePlus and its affiliated funds. The State Department says MiraclePlus provided significant support, though the public record does not establish that it knew about the theft. The measures may include freezing the entities' US assets, and US dealings with them must wind down by January 19, 2027.

Why now? The action is a rare use of the 2022 Protecting American Intellectual Property Act, which lets the government target those tied to trade-secret theft — and a rare case of Washington sanctioning a venture firm over its seed bet.

What's new? The case broadens the policy focus from individual employees and alleged recipients to the investors and financing networks that back them, potentially raising due-diligence stakes for firms funding sensitive AI ventures.

The signal: This is an enforcement signal, not evidence of a new Google breach or a general ban on Chinese AI investment. But by reaching into venture capital, Washington is putting backers of sensitive technology on notice.

Read more: US State Department, Bloomberg Law