On October 19, 2026, the US government sanctioned MiraclePlus, a Beijing venture firm that runs startup camps, together with two of its funds, a related partnership, and a Shanghai startup called Zhisuan. The legal basis is the Protecting American Intellectual Property Act (PAIPA), and the underlying story is the theft of Google AI infrastructure secrets by former engineer Linwei Ding. The designations are documented in the State Department fact sheet and an OFAC recent actions notice.
This is a rare case where sanctions target an investor for what a founder pitched, so the details matter. Below is what the primary documents confirm, what they do not say, and why AI founders and investors should read it.
TL;DR: the five designated entities
| Entity | Role per the State Department | Established |
|---|---|---|
| Shanghai Zhisuan Technology Co Ltd | Startup created by Linwei Ding, marketed as able to build a platform to accelerate machine learning workloads | 2023 |
| Qiji Chuangtan Beijing Investment Management Co Ltd (MiraclePlus) | Venture firm; gave seed capital for an ownership stake in Zhisuan | 2019 |
| Beijing Qiji Chuangtan Phase I Venture Capital Center LP | Fund managed by MiraclePlus | 2020 |
| Beijing Qiji Chuangtan Phase II Venture Capital Center LP | Fund managed by MiraclePlus | 2022 |
| Beijing Qiji Chuangtan Zhiyuan Enterprise Management Center LP | Wholly owned by Phase I | 2019 |
OFAC placed them on its Non-SDN Menu-Based Sanctions List, not the main SDN list, because PAIPA works through a menu of measures.
What the State Department says happened
According to the fact sheet, Zhisuan was marketed as capable of developing a software platform that could accelerate machine learning workloads, including training large models on supercomputing chips. Ding applied on Zhisuan's behalf to MiraclePlus, "touting his experience with and knowledge of Google's technology and internal systems" and claiming Zhisuan could replicate Google's infrastructure technology.
MiraclePlus, described as a venture firm that "invests primarily in Chinese tech startups and holds two startup camps a year," gave seed capital in exchange for an ownership stake. Ding used the stage MiraclePlus provided to present the company. The State Department's findings are that Zhisuan "knowingly engaged in, or benefitted from, significant theft of trade secrets" occurring on or after January 5, 2023, and that MiraclePlus "provided significant financial, material, or technological support" for such theft or benefited significantly from it. The two funds and the Zhiyuan partnership are designated as entities owned or controlled by MiraclePlus.
Who is Linwei Ding, and what was the Google case?
Ding is a former Google software engineer. According to the Justice Department, a federal jury in San Francisco found him guilty on January 29, 2026 of economic espionage and theft of trade secrets involving Google's AI infrastructure, including its custom TPU chips and the software that orchestrates them into supercomputers. Press coverage of the trial says he took more than 2,000 pages of confidential material. The sanctions documents themselves do not describe the criminal case, so check the DOJ record for counts and sentencing status.
Why does this matter to AI readers? The material in question is the know-how for running huge training clusters, the kind of knowledge behind the AI chip race between the US and China and DeepSeek's reported chip co-design with Huawei. Hardware is export-controlled; infrastructure software and operational know-how are harder to control, which is why trade secret law is being pulled into the toolbox.
What the sanctions actually do
PAIPA, signed into law in January 2023, mandates sanctions on foreign persons who engage in or benefit from significant theft of US trade secrets. For these five entities, the OFAC notice lists five measures:
- Blocking of property: all property and interests are blocked and transactions prohibited, except importation of goods.
- Loan limits: US financial institutions may not lend or extend credit exceeding 10 million dollars in any 12-month period, subject to the statute's exception.
- Foreign exchange: transactions in foreign exchange subject to US jurisdiction involving the entity are prohibited.
- Banking: transfers of credit or payments through financial institutions subject to US jurisdiction that involve the entity are prohibited.
- Investment ban: US persons may not invest in or purchase significant amounts of the entity's equity or debt.
OFAC also issued PAIPA General License 1 (transactions authorized under the cyber-related sanctions regulations) and General License 2, "Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on October 19, 2026." The wind-down license is what lets US counterparties exit existing dealings in an orderly way; read its text for dates and scope.
Why PAIPA, and why now?
PAIPA is a statute, not an executive order. Because it "mandates sanctions" once the findings are made, the government does not have to build a case under emergency powers; it has to show a foreign person knowingly engaged in or benefited from significant trade secret theft, or supported it. The State Department fact sheet sets the cutoff at theft occurring on or after January 5, 2023, and requires a likely significant threat to US national security, foreign policy or economic health. Ding's Zhisuan was founded in October 2023, according to the OFAC entry, which fits that window.
The menu-based design matters too. PAIPA gives the administration a list of measures to choose from, and here it picked the harshest set for all five entities: blocking, lending limits, foreign exchange, banking and an investment ban. That is the same package in every OFAC entry, so there is no gradation between the startup and the investor.
The State Department closes with a note that sanctions are meant "to bring about a positive change in behavior" and points to its delisting guidance. In practice that means MiraclePlus has a formal route to petition for removal, though nothing in the documents describes what it would need to show.
Questions readers are asking
What is MiraclePlus? The State Department describes it plainly: a venture firm that invests primarily in Chinese tech startups and holds two startup camps a year.
Does this ban Chinese AI startups from US tools? No. The measures apply to the five entities and to US persons dealing with them. Nothing in the notices restricts use of US software or models by other Chinese companies.
Is Google a party to this action? Google is the victim named in the underlying theft, but the sanctions come from the US government, not Google.
What is the broader pattern? Between chip export rules, accusations of model distillation, and now trade secret sanctions, Washington is using several legal tools at once against AI technology transfer. Each tool has different proof standards, which is why a case built around one engineer's uploads could reach an investor.
What is not confirmed
Some claims circulating on social media go beyond the documents:
- MiraclePlus's management. The official notices name no individuals other than Ding as Zhisuan's founder. Why management was not designated is not explained.
- Portfolio companies. The lists include no MiraclePlus-backed startups. Whether OFAC's usual 50 percent ownership rule extends to this menu-based program should be checked in OFAC guidance, and it would only reach companies that actually meet the ownership test.
- Chinese response. At the time of writing we found no statement from MiraclePlus or Beijing in the primary documents. Earlier, China had threatened countermeasures over US accusations of AI model theft, as we covered in China warns of countermeasures after US accuses six AI firms of model theft.
Why this matters for AI builders and investors
For investors and fund managers: the action sanctions an incubator and its funds, not just a company. Any US limited partner, bank or co-investor with exposure to the Qiji Chuangtan funds should screen it now and look at the wind-down license. Cap tables of startups that took MiraclePlus capital deserve a review.
For startups: the fact sheet frames a founder's pitch as evidence. A founder claiming an ability to replicate a former employer's internal systems can make the funder a target. Document clean-room provenance for anything built on prior-employer knowledge.
For security teams: insider theft of AI infrastructure know-how is now a sanctions issue as well as a criminal one. Access controls, upload monitoring and offboarding reviews are the first line of defense.
For policy watchers: this adds to a run of US measures, including the Taiwan move to criminalize AI chip and server exports to China and China's own 48-item AI export catalogue covering model weights. The trend is toward treating AI know-how, not only chips, as a controlled asset on both sides.
How to verify yourself
- Read the OFAC recent action for the exact entity names, aliases and unified social credit codes.
- Read the State Department fact sheet for the stated grounds.
- Search OFAC's sanctions list tool for names of your counterparties, including the alias "MiraclePlus" and the Chinese names.
- For the criminal case, check Justice Department releases and court records rather than aggregator summaries.
We will add an update section if MiraclePlus, its investors or the Chinese government respond, or if OFAC amends the general licenses.
Related reading
- Nvidia 34%, Huawei 28%: China AI chip share, claimed vs verified
- DeepSeek and Huawei co-design AI chips: claimed vs verified
- China warns of countermeasures over US model theft accusation
- Taiwan to criminalize AI chip and server exports to China
- China's 48-item AI export catalogue
- US sanctions on an AI hosting collective
Details reflect the State Department and OFAC publications of October 19, 2026 and may change as OFAC updates its notices.