Former Google software engineer Linwei Ding was charged by U.S. authorities on Tuesday with stealing trade secrets related to artificial intelligence for two Chinese companies he was covertly employed by. The indictment was enlarged to 14 counts.
TakeAway Points:
- U.S. prosecutors on Tuesday unveiled an expanded 14-count indictment accusing former Google software engineer Linwei Ding of stealing artificial intelligence trade secrets to benefit two Chinese companies he was secretly working for.
- Snap beat Wall Street estimates for quarterly profit on Tuesday, benefiting from improvements to the Snapchat parent’s advertising platform, sending its shares up 6% in extended trading.
New case on stolen AI secrets
Ding, 38, a Chinese national, was charged by a federal grand jury in San Francisco with seven counts each of economic espionage and theft of trade secrets.
Each economic espionage charge carries a maximum 15-year prison term and $5 million fine, while each trade secrets charge carries a maximum 10-year term and $250,000 fine.
The defendant, also known as Leon Ding, was indicted last March on four counts of theft of trade secrets. He is free on bond. Lawyers for Ding did not immediately respond to requests for comment.
Ding’s case was coordinated through an interagency Disruptive Technology Strike Force created in 2023 by the Biden administration.
The initiative was designed to help stop advanced technology from being acquired by countries such as China and Russia or potentially threatening national security.
Prosecutors said Ding stole information about the hardware infrastructure and software platform that lets Google’s supercomputing data centers train large AI models.
Some of the allegedly stolen chip blueprints were meant to give Google an edge over cloud computing rivals Amazon.com and Microsoft, which design their own, and reduce Google’s reliance on chips from Nvidia.
Prosecutors said Ding joined Google in May 2019 and began his thefts three years later, when he was being courted to join an early-stage Chinese technology company.
Ding allegedly uploaded more than 1,000 confidential files by May 2023 and later circulated a PowerPoint presentation to employees of a China startup he founded, saying that country’s policies encouraged development of a domestic AI industry.
Google was not charged and has said it cooperated with law enforcement.
According to court records describing a Dec. 18 hearing, prosecutors and defense lawyers discussed a “potential resolution” to Ding’s case, “but anticipate the matter proceeding to trial.”
Snap Surpass Profit Estimates On Advertising Platform
Snap exceeded Wall Street projections for quarterly profit on Tuesday, benefiting from improvements to the Snapchat parent’s advertising platform, pushing its shares up 6% in extended trade.
Social media firms and advertisers are navigating an uncertainty around a possible ban of popular short video app TikTok in the U.S. that could help Snap, analysts have said.
“Overall environment of uncertainty (around TikTok) is benefiting our business. Advertisers are very focused on contingency planning and diversifying their spend,” CEO Evan Spiegel said on a post-earnings call.
Snap could increase the price of its Snapchat+ subscription service to boost average revenue per user, Spiegel added. In the fourth quarter, Snapchat+ subscribers doubled to 14 million.
The company has been investing in artificial intelligence and machine learning tools to help create more personalized ads.
It has focused on direct response ads that are designed to prompt specific actions like app downloads or website visits, at a time when there is some weakness in brand awareness ads.
That has helped Snap tap small- and mid-sized businesses, making them the largest contributor to the company’s ad revenue growth in 2024.
Snaps—video ads and Promoted places
The company will roll out Sponsored Snaps—video ads that appear in users’ inboxes—and Promoted Places, a feature that highlights business locations on Snap Map, to additional markets.
“Snap’s diligent work on its ad platform and in diversifying its revenue streams through subscriptions have paid off,” said Jasmine Enberg, principal analyst at eMarketer.
Snap reported adjusted earnings per share of 16 cents for the fourth quarter ended Dec. 31, beating analysts’ average estimate of 14 cents, according to LSEG-compiled data.
Daily active users of Snapchat increased 9% to 453 million, beating estimates of 450.8 million.
The company forecasts first-quarter revenue of $1.33 billion to $1.36 billion, the mid-point of which was slightly above estimates of $1.33 billion.
It also expects adjusted EBITDA of $40 million to $75 million in the quarter, below expectations of $78.1 million.
Revenue in the quarter jumped 14% to $1.56 billion, marginally beating the average estimate of $1.55 billion.
