Chinese engineers developing AI chips that can be used in “advanced weapons systems” have gained access to cutting-edge technology from the UK, The Guardian can reveal.
Described According to analysts as “China’s leading AI chip designers,” Moore Threads and Biren Technology are subject to US export restrictions for their development of chips that “can be used provide artificial intelligence capabilities for further development of weapons of mass destruction, advanced weapons systems, and high-tech surveillance applications that create national security concerns.”
However, ahead of the US blacklisting in 2023, the two companies obtained extensive licenses with UK-based Imagination Technologies, which is among a handful of companies worldwide that design an advanced type of microchip crucial for artificial intelligence systems, and is considered a gem. of the UK technology industry.
An Imagination spokesperson said: “At no time has Imagination (or its owners) considered or implemented transactions with third parties with the objective of allowing China or any other nation state to use or direct Imagination technology for state or military end uses.”
While Imagination representatives confirmed the existence of the licenses with Moore Threads and Biren Technology, they denied claims that the company, owned by a private equity fund backed by Chinese state money, was attempting to deliberately transfer its latest secrets. to China.
Two former Imagination executives say the “knowledge transfer programs” that accompanied the licenses were so comprehensive that they risked Chinese companies learning how to replicate Imagination’s experience. One believed the information provided meant that Imagination could “have given (Chinese companies) the ability to manufacture the technology.”
Both employees left the company before the knowledge transfer programs were fully implemented. Imagination representatives say the programs were strictly limited in transferring their expertise to China, and that such agreements are common in the industry.
As Xi Jinping’s authoritarian regime seeks to acquire technological prowess fit for a superpower, the allegations involving Imagination illustrate the tensions between doing business with the world’s second-largest economy and preserving national security.
From its headquarters in a Hertfordshire village, Imagination engineers produce designs that weave together billions of transistors and license them to manufacturers who produce chips used in everything from cars to iPhones. It specializes in graphics processing units (GPUs), which were developed to produce smooth visuals in video games, but which turned out to be ideal for the complex operations needed in artificial intelligence. Imagination designs are present on 13 billion devices.
The spokesperson said Imagination “has always complied with applicable export and trade compliance laws.” They said their licensing agreements were “focused on enabling our customers to design” systems for “the consumer electronics, automotive and personal computing markets.”
It is understood that Imagination does not believe its technology meets performance thresholds for military applications and maintains that its contracts prohibit military uses. But Alan Woodward, a cybersecurity expert at the University of Surrey, said it was difficult for companies like Imagination to ensure their expertise did not end up contributing to applications such as self-guided drones, one of the most sought-after areas of weapons research. .
At least three Chinese companies have obtained so-called “architectural licenses” to use Imagination’s chip designs since 2020. Since these licenses allow the customer to request modifications to the designs, Imagination reveals part of the process by which its engineers arrived, to over many years. years – in the intricate plans.
Imagination was aware of the risks of sharing too much of its intellectual property. For years, the company worked closely with Apple: Imagination’s chip designs helped make the iPhone possible. But in 2017, Apple announced that it would begin designing chips itself. Imagination accused Apple of unauthorized use of its expertise. The parties have reached an agreement on a new $330 million deal to license Imagination products to Apple.
The two former Imagination experts who spoke to The Guardian believe that architectural licenses granted to Chinese companies could be exploited in the same way: to extract Imagination’s secrets.
One said it had been a mistake for Theresa May’s Conservative government to allow Canyon Bridge, a private equity firm funded by Chinese state money, to acquire Imagination in 2017.
The acquisition occurred after the United States had blocked Canyon Bridge will buy US chipmaker Lattice for $1.3 billion, arguing that “the Chinese government’s role in supporting this transaction” posed “a risk to US national security.” In the United Kingdom, where May sought To “step up the golden era in UK-China relations”, Canyon Bridge encountered no such obstacles and an $800 million deal was struck.
The Chinese-backed buyers gave the UK government assurances about Imagination’s future, including that the chip designer would not be moved abroad. They appointed Ron Black, a veteran technology executive, as the new head of Imagination. He would later tell an employment tribunal that he was concerned that China Reform, the state investment body that funded the Canyon Bridge acquisition, wanted to “steal the technology”.
In 2020, Black opposed a plan to appoint four China Reform representatives to the company’s board of directors. He said in a witness statement that he informed Ian Levy, then technical director of the UK’s electronic intelligence agency, GCHQ, of “my concerns about Imagination being controlled by the Chinese government”. Levy responded that “this would be a problem for the UK government.”
Imagination’s owners abandoned the plan to appoint Chinese directors after Oliver Dowden, then a Conservative minister overseeing the digital sector, sent a letter “seeking assurances that commitments made by Canyon Bridge in 2017 regarding management, employees and the company’s base in the UK would be met.” still standing.”
Black left the company. The labor court reportedly found this month that Black had been willing to allow licensing of some of Imagination’s most basic technologies in China, but that he was fired for blowing the whistle on the attempt to put the company under Chinese control.
One of Imagination’s former insiders said that after Black’s departure and the failure to install Chinese directors, it seemed “clear that the strategy was to get technology transfer to Chinese companies.” Representatives of the imagination question it.
The former insider said: “With each license there was a multi-million dollar deal to teach them how (the intellectual property) was designed and how to modify the design.” This was called a “knowledge transfer program” for the expertise that Imagination had “uniquely built over the years,” the former insider said.
Under the plan, Imagination’s top engineers were to give their Chinese counterparts “a proper step-by-step understanding of how the GPU is developed” over two years starting in about 2021, said the former insider, who left the company without knowing Yes It was delivered completely.
The second former whistleblower also left before the Chinese engineers had received full training, but said it was “very difficult to deny that (technology transfer) was an obvious result of obtaining architectural licenses in that way.”
Imagination is understood to consider the agreements with Chinese clients to have been “completely normal” and “limited in scope, duration and usage rights”.
Imagination, which has relied heavily on US revenue like Apple’s, is understood to have a policy of not doing business with any company that Washington includes on its “entity list” subject to export restrictions. That would suggest that it has now rescinded the licenses it granted to two Chinese companies that were added to the list in October 2023.
A new report from the research organization. Transparency between the UK and China raises more questions about Chinese companies.
Moore Threads, founded by a former Chinese boss at US chipmaker Nvidia, claims to have developed the first “made in China” GPUs. But a report in the trade press says that the “key parts” of these chips were taken from Imagination. An industry analyst who said one of the company’s GPUs used Imagination technology. wrote: “Moore Threads hasn’t been very honest about it.”
The other Chinese chipmaker, Biren Technology, makes GPUs for artificial intelligence systems. In addition to Chinese state funding, Biren received funds of the Russia-China Investment Fund, part of Beijing’s deepening alliance with Moscow. Moore Threads and Biren did not respond to requests for comment.