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Former Google Engineer Faces New Charges for Stealing AI Secrets for Chinese Companies

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A former Google software engineer, Linwei Ding, has been hit with a new 14-count indictment, accusing him of stealing artificial intelligence trade secrets to benefit two Chinese companies. Ding, 38, a Chinese national, was charged by a federal grand jury in San Francisco with seven counts of economic espionage and seven counts of theft of trade secrets. The charges stem from his actions during his time at Google, where he allegedly stole sensitive information related to the company’s supercomputing data centers, which are crucial for training large AI models.

Each economic espionage charge carries a maximum 15-year prison sentence and a $5 million fine, while each theft of trade secrets charge is punishable by up to 10 years in prison and a $250,000 fine. Ding was originally indicted in March 2023 on four counts of theft of trade secrets. He remains free on bond as his case proceeds. His defense lawyers have not yet commented.

The case is part of a broader initiative by the Biden administration, known as the Disruptive Technology Strike Force, which was launched in 2023 to prevent advanced technology from being acquired by adversarial countries like China and Russia. According to prosecutors, Ding began stealing proprietary information in 2022, after being recruited by a Chinese startup, and allegedly uploaded more than 1,000 confidential files before May 2023. These files reportedly included chip blueprints aimed at giving Google an edge in the competitive cloud computing industry, particularly against rivals like Amazon and Microsoft, as well as reducing its reliance on Nvidia chips.

Ding’s alleged thefts were discovered when he circulated a PowerPoint presentation detailing his plans for China’s AI industry to employees of the startup he co-founded. Google has not been charged and has cooperated with law enforcement throughout the investigation.

The case is being closely watched and may go to trial, although discussions have been held about a potential resolution.

Alphabet Faces Investor Scrutiny Over AI Spending Amid Slowing Cloud Growth

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Alphabet is set to report earnings on Tuesday, with investors closely watching its substantial AI investments as revenue growth slows due to weaker advertising and cloud performance. The Google parent’s capital expenditure for 2024 is estimated at $50 billion, with further increases expected in 2025 to support cloud expansion and AI-driven search enhancements.

The rise of low-cost AI models, such as those from Chinese startup DeepSeek, has intensified concerns over a potential AI price war. Alphabet, like Microsoft and Meta, is defending its high AI spending, arguing it is necessary to maintain a competitive edge.

Google Cloud, a key growth driver, is anticipated to show a slowdown in the fourth quarter. The segment is expected to report a 32% revenue increase, compared to 35% in the previous quarter. This performance will be scrutinized following Microsoft’s recent results, where Azure’s core cloud services underperformed despite AI-driven gains. Analysts are keen to see whether Google experiences a similar trend.

Alphabet’s Search and Other revenue is projected to have grown 11.2% in Q4, slightly lower than the 12.2% increase in Q3. The company continues to face rising competition from Amazon and TikTok in the digital ad space. However, higher political ad spending linked to the upcoming U.S. Presidential elections may have provided a temporary boost.

Overall, Alphabet’s revenue is estimated to have grown 11.9% year-over-year to $96.6 billion, reflecting a slowdown from the previous quarter. Despite a 7% rise in its stock price this year, concerns about a potential deceleration in its cloud segment have mounted, especially after Microsoft’s disappointing cloud results.

Investors will be closely watching Alphabet’s ability to balance AI investments with profitability, as well as its strategy to maintain leadership in both the search and cloud computing markets.

 

Google Appeals to Overturn App Store Verdict in Legal Battle with Epic

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Alphabet’s Google and Epic Games faced off in a U.S. appeals court on Monday, as Google sought to overturn a jury verdict and a judge’s order requiring it to modify its app store policies.

During the hearing before the 9th U.S. Circuit Court of Appeals in San Francisco, Google’s attorney argued that the trial judge had made legal errors that unfairly benefited Epic Games. The lawsuit, initially filed in 2020, accused Google of monopolizing app distribution and in-app payment systems on Android devices. A jury ruled in favor of Epic in 2023, leading U.S. District Judge James Donato to order Google to implement reforms, including allowing users to download competing app stores via the Play Store.

Google has appealed the decision, which is currently on hold. Jessica Ellsworth, representing Google, contended that the company faces strong competition from Apple’s App Store and that the trial judge had improperly limited Google’s ability to present that argument. However, Judge Danielle Forrest of the 9th Circuit challenged Google’s stance, emphasizing differences between the Android and Apple ecosystems.

Epic’s attorney, Gary Bornstein, urged the court to uphold the previous ruling, arguing that Google’s app store policies had harmed competition for years. He also dismissed Google’s claims that the required changes would compromise user privacy and security.

The case has attracted support for Epic from Microsoft, as well as the U.S. Justice Department and the Federal Trade Commission. A decision from the 9th Circuit is expected later this year, with the possibility of further appeal to the U.S. Supreme Court.