Chinese engineers developing chips for artificial intelligence that could be used in “advanced weapons systems” have been given access to cutting-edge British technology, the Guardian can reveal.
Describe By analysts as “China’s premier AI chip designers,” Moore Threads and Biren Technology are subject to U.S. export restrictions due to their development of chips that “can be used provide artificial intelligence capabilities to further develop weapons of mass destruction, advanced weapons systems, and high-tech surveillance applications that raise national security concerns.”
However, ahead of the U.S. blacklist in 2023, both companies obtained extended licenses from British company Imagination Technologies, which is one of a handful of companies around the world designing an advanced type of microchip crucial for AI 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 any transactions with third parties for the purpose of enabling China or any other nation-state to use or direct the Imagination technology for state or military purposes.
While Imagination representatives confirmed the existence of licenses with Moore Threads and Biren Technology, they denied claims that the company, owned by a private equity fund backed by Chinese state money, allegedly deliberately sought to transfer its cutting-edge secrets. in China.
Two former senior Imagination executives say the “knowledge transfer programs” accompanying the licenses were so comprehensive that they risked Chinese companies learning how to replicate Imagination’s expertise. One thought the information provided meant Imagination could have “given (Chinese companies) the ability to manufacture the technology.”
Both insiders left the company before the knowledge transfer programs were fully implemented. Imagination representatives say the programs were strictly limited in how much of its expertise was transferred to China, and that such arrangements are common in the industry.
As Xi Jinping’s authoritarian regime seeks to acquire technological prowess worthy of a superpower, the allegations involving Imagination illustrate the tensions between doing business with the world’s second-largest economy and preserving national security.
From their headquarters in a Hertfordshire village, Imagination engineers produce designs that combine billions of transistors, licensed from manufacturers who produce chips used in everything from cars to iPhones. It specializes in graphics processing units (GPUs), developed to produce the smooth images of video games, but which have proven ideal for the complex operations required for artificial intelligence. Imagination creations are present on 13 billion devices.
The spokesperson said Imagination “has always complied with applicable export and trade laws.” They said its licensing agreements “are intended to enable our customers to design” systems for “the consumer electronics, automotive and personal computer markets.”
It is understood that Imagination does not believe its technology meets performance thresholds for military applications and maintains 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 be sure their expertise would not end up contributing to applications such as self-targeting drones, l one of the most sought-after areas of weapons research. .
At least three Chinese companies have obtained “architectural licenses” to use Imagination’s chip designs since 2020. Since these licenses allow the customer to request changes to the designs, Imagination reveals part of the process by which its engineers are arrived – over many years. years – with complex plans.
Imagination was aware of the risks associated with excessive sharing 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 agreement on a new $330 million deal to license Imagination products to Apple.
The two former Imagination insiders 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 Theresa May’s Conservative government made a mistake by allowing the 2017 takeover of Imagination by Canyon Bridge, a private equity firm funded by Chinese state money.
The acquisition took place after the United States blocked Canyon Bridge to buy US chipmaker Lattice for $1.3 billion on the grounds that “the Chinese government’s role in supporting this transaction” represented “a risk to US national security”. In the United Kingdom, where May research To “intensify the golden age of UK-China relations”, Canyon Bridge encountered no such obstacles and an $800 million deal was reached.
Chinese-backed buyers have given the British government assurances about Imagination’s future, including that the chip designer would not be moved overseas. They named Ron Black, a veteran technology executive, as Imagination’s new boss. He would later tell an employment tribunal that he was increasingly concerned that China Reform, the public investment body which funded the Canyon Bridge buyout, wanted to “steal the technology”.
In 2020, Black opposed a plan to appoint four Chinese reform representatives to the company’s board of directors. He said in a witness statement that he had informed Ian Levy, then technical director of the British electronic intelligence agency GCHQ, of “my concerns about the Chinese government’s control of Imagination”. Levy responded that “that would be a problem for the British government.”
Imagination’s owners abandoned plans to appoint Chinese administrators after Oliver Dowden, then the Conservative digital minister, sent a letter “seeking reassurance that commitments made by Canyon Bridge in 2017 regarding the management, employees and base of the company in the UK “still standing”.
Black left the company. The employment tribunal reportedly concluded this month that Black was willing to license some of Imagination’s most basic technologies in China, but was sacked for exposing the attempt to take the company under control Chinese.
One of the former Imagination insiders said that after Black left and failed to install Chinese directors, it seemed “clear that the strategy was to get technology transfer to Chinese companies.” Representatives of Imagination dispute this.
The ex-insider said: “With each license, there was a multi-million dollar deal to teach them how (the intellectual property) was designed and how to change the design. » It was a “knowledge transfer program” for 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 real step-by-step learning how to develop the GPU” over two years starting around 2021, said the former insider, who left the company without knowing if that was the case. was fully delivered.
The second former insider also left before Chinese engineers had received full training, but said it was “very difficult to deny that (technology transfer) was an obvious result of obtaining licenses from ‘architecture in this way’.
It is understood that Imagination considers the agreements with Chinese customers to be “completely normal” and “limited in scope, duration and usage rights”.
Imagination, which relies heavily on U.S. revenues such as Apple’s, reportedly has a policy of not doing business with any company that Washington places on its “entity list” subject to export restrictions. This would suggest that it has now terminated the licenses it had granted to two Chinese companies that were added to the market. list in October 2023.
A new report from the research organization Transparency between the UK and China raises further questions about Chinese companies.
Moore Threads, founded by a former Chinese boss of American chipmaker Nvidia, claims to have developed the first “China-grown” GPUs. But an article published in the specialist press indicates that “key parts” of these chips were extracted from Imagination. An industry analyst who said one of the company’s GPUs used Imagination technology wrote: “Moore Threads hasn’t been very upfront about this.”
The other Chinese chipmaker, Biren Technology, makes GPUs for AI systems. In addition to Chinese state finances, Biren received funding of the Russia-China Investment Fund, part of the increasingly close alliance between Beijing and Moscow. Moore Threads and Biren did not respond to requests for comment.