Tech titans tighten security as Chinese espionage escalates
Tech titans tighten security as Chinese espionage escalates
For years, foreign countries, primarily China, have operated espionage systems focusing on large technology companies. In response to the increasing prevalence of this issue, many tech companies are tightening their selection and recruitment procedures.
In May 2022, a Google employee of Chinese origin, Linwei Ding, began uploading secret files to his personal cloud account. These files detailed the infrastructure and methods enabling Google's computing centers to train artificial intelligence (AI) models. Over time, Ding uploaded 500 files and transferred them to a Chinese technology company. Shortly after, he was appointed Vice President of Technology at that company, and a year later, he founded his own AI startup. Throughout this period, Ding continued working at Google. He was exposed only last December when he attempted to upload additional Google files to the cloud. By the time an indictment was filed against him in March this year, Ding had already fled to China.
Ding's case is among the most prominent but not the only instance of foreign countries, primarily China, operating espionage and intelligence-gathering systems targeting employees of large technology companies, particularly American ones. The goal is to extract secret information about cutting-edge technological developments, chiefly artificial intelligence. While state-funded industrial espionage has existed for decades, it has significantly increased in the past two years.
Today, the world stands on the brink of a significant turning point. Many estimates suggest that the breakthrough of generative artificial intelligence (GenAI) will lead to substantial advancements in new product development and employee productivity for countries and companies that develop and adopt the technology swiftly. Concurrently, the Biden administration's tightening restrictions on exporting high-performance chips to China hinder the country's and its companies' ability to develop advanced AI models. These factors incentivize China to seek information indirectly. In recent years, the proportion of workers from Southeast Asia, particularly China, in technology companies has significantly increased due to a large supply of workers, their diverse talents and abilities, and relatively low employment costs compared to American or other Western workers.
As a result, the companies targeted by this espionage system are beginning to change their hiring and screening processes to identify "spies" ahead of time. According to a report by the Financial Times, technology companies, including Google and OpenAI, have recently tightened screening and security verification procedures for new and existing employees amid growing fears of espionage by foreign governments, particularly China. Venture capital funds such as Sequoia, which invests in Elon Musk's xAI, urge their portfolio companies to tighten security verification procedures for employees, following warnings that foreign spy agencies are targeting technology workers in the U.S.
Chinese espionage against American technology companies is a significant problem, especially concerning enterprise software products, large language models (LLMs, which power services like ChatGPT), and weapons systems. The adversaries are ancient cultures fighting for their survival, not only now but for the next thousand years.
State espionage against technology companies, particularly by China, is a well-known issue in the high-tech industry in the U.S. and other countries. For example, in 2015, the US charged six people, including two professors from Chinese universities, with economic espionage and stealing trade secrets from American companies employing them a decade earlier. In 2022, a Chinese telecom company was accused of stealing technology from Motorola Solutions. Last year, the Justice Department charged a former General Electric (GE) employee, an American citizen of Chinese descent, with stealing the company's industrial secrets related to turbine production and smuggling them to secret partners in China.
Recently, the AI race and the Biden administration's chip war against China have increased China's ambition to obtain advanced information on artificial intelligence and weapons systems. Besides Ding's case, three suspects were arrested in Germany in April for stealing "innovative technologies for military use" for China. The suspects have been operating in the Chinese intelligence service since June 2022. Two weeks ago, a Canadian resident of China admitted in a New York federal court to stealing Tesla's trade secrets related to battery production and attempting to sell them to foreign government agents.
These exposed cases represent only the tip of the iceberg of industrial espionage efforts by China and other countries. Technology companies are intensifying their screening and verification efforts for employees and recruits, using special systems designed to prevent hostile countries from targeting employees and suppliers for information theft.
One such system, developed by a Utah startup called Strider Technologies, uses AI to gather information about the methods used by foreign intelligence agencies. For example, it monitors hundreds of Chinese "talent factories" that recruit foreign scientists and lecturers, incentivizing them to steal technologies to advance China's economic and military goals. If an employee is flagged by Strider's system, the company can conduct enhanced verification procedures, such as checking family members, financial ties abroad, or travel history to countries where foreign intelligence agencies operate recruitment drives. This geopolitical battle places the industry at the forefront.
Technology companies seeking to protect their developments and innovations cannot afford to ignore this threat. However, tightening screening and verification procedures may provoke backlash, particularly if it leads to suspicion toward workers of Chinese origin and affects them solely based on their origin. Such procedures can cause resentment among workers, damage morale, and lead to departures in favor of companies where they do not feel treated as potential spies. Companies must balance preventing internal espionage with maintaining a positive working environment, as any misstep could be costly.
