Indictment of former Apple self-driving engineer sends message on national security risk, experts say

Charges the United States made against a former Apple software engineer accusing him of attempting to steal the company's self-driving technology and fleeing to China in 2018 send a message, industry and legal experts say: Investment in emerging technology is crucial, but the industry must be proactive against security risks.

The timing of the charges against Weibao Wang, who according to multiple news reports left Apple to work at Jidu, an electric vehicle startup jointly owned by Chinese tech giant Baidu and automaker Geely, is linked to the role artificial intelligence may play in U.S. national security, experts say. AI's place in the U.S. will likely become more prominent as provisions in the Inflation Reduction Act and Infrastructure Investment and Jobs Act give American companies incentives to nearshore portions of their supply chain from China, they said.

"It's a signal from the Biden administration that these types of risks are going to get increased attention," said Nathan Picarsic, co-founder of Horizon Advisory, a geopolitical consultancy that focuses on China.

This is the second alleged illegal transfer of automotive technology intellectual property to a Chinese company in recent months that was made public. In April, lidar maker Ouster sued China's Hesai Group on allegations of patent infringement.

Last week, the U.S. International Trade Commission voted to start an investigation into the trade practices of Hesai Group based in Shanghai, China, and its related entities.

There's also a costly economic impact of intellectual property on the U.S. economy, said Jeff Peters, a partner at Ibex Investors, a Denver venture capital fund that focuses on the mobility sector.

A 2019 FBI report said that the annual cost to the U.S. economy of counterfeit goods, pirated software and theft of trade secrets is between $225 billion and $600 billion.

In 2018, the year of Weibo's alleged theft, autonomous vehicle technology companies had high valuations as they raced to develop the technology first, Peters said.

Around the same time, Anthony Levandowski, who helped found Google's self-driving company, Waymo, was convicted of stealing intellectual property from the company to start Otto, an autonomous trucking company, which was acquired by Uber Technologies.

In 2020, Levandowski pleaded guilty and was sentenced to 18 months in prison for trade secret theft related to Google's self-driving car program. In 2021, Levandowski was pardoned by President Donald Trump.

"There was a feeling within the autonomous vehicle industry that there was some magic bullet that ... if you learned how to develop this algorithm that would enable autonomous vehicles, it could mean billions of dollars in value for a company and millions upon millions of dollars for the people that were able to deliver that," Peters said.

As for potential action that could be taken against Jidu, Jeanne Gills, an intellectual property attorney at Foley and Lardner, told Automotive News that Apple could initiate a U.S. International Trade Commission proceeding to ban the company from importing cars that use technology that infringes on its patents and other trade sanctions.

"Certainly because the FBI was involved, this is something they're obviously going to watch," Gills said. "There are sanctions or things that could be done or something via customs to limit the import of vehicles potentially by that company."

Even though fully autonomous vehicle technology is years away from commercial application, China's state-sponsored companies are looking to gain a perceived or real edge in the automotive sector, Picarsic said.

"They're out there in the world facing the likes of Apple and Google on the software, on the hyper scale or cloud side and sort of against lower-market OEMs in emerging markets and increasingly in European markets on Geely's side," Picarsic said.

Western automakers have a unique predicament because global automakers — perhaps more than any major industrial sector — have gone to China to produce parts and vehicles and to sell cars, Picarsic said.

It's important for Geely, which owns Volvo and Lotus and sells Polestar electric vehicles in the U.S., to position its brands on the cutting edge of technology development, Picarsic said.

"Anything that they can bring to bear in terms of opportunities to leapfrog on the software side, I think are of relative immediate interest," Picarsic said. "They're not going to change their product portfolio, but it might give Lotus a chance to jump ahead when it rolls out its first SUV product, so I think that they're at a precipice."