An engineer who worked on Apple’s secretive autonomous car project allegedly stole trade secrets for a Chinese car startup backed by Alibaba, according to new charges filed by the FBI.
Xiaolang Zhang, who worked for Apple from December 2015 until May 2018, has been charged in federal court with stealing trade secrets, and faces 10 years imprisonment and a $250,000 fine. Zhang was arrested trying to leave the country this past weekend. The news was first reported by The Mercury News.
“Apple takes confidentiality and the protection of our intellectual property very seriously,” a spokesperson for the company said in a statement to The Verge. “We’re working with authorities on this matter and will do everything possible to make sure this individual and any other individuals involved are held accountable for their actions.”
Zhang faces 10 years in prison
Zhang designed and tested circuit boards as part of the compute team of Apple’s autonomous car project, according to the federal complaint, which was filed this week in California’s Northern District. In it, the company says that Zhang returned from a month of paternity leave at the end of April, and informed his supervisor at Apple that he was resigning so he could spend time with his ailing mother in China. In that meeting, Zhang also shared that he planned to work for an electric car startup in China called Xiaopeng Motors.
Guangzhou Xiaopeng Motors Technology, or known simply as Xpeng, was founded in 2014 by mobile internet entrepreneur He Xiaopeng. The company was founded shortly after Xiaopeng’s mobile browsing business, UCWeb, was acquired by Chinese e-commerce giant Alibaba in what was, at the time, the biggest merger in the country’s history. In January of this year, Xpeng raised $350 million in a Series A round of financing led by Alibaba and Foxconn. And just last week, The Information reported that Alibaba is leading a new round of financing that would value Xpeng at nearly $4 billion.
Once Zhang told his Apple supervisor about his intentions, and after “feeling that he had been evasive,” according to the filing, a member of Apple’s New Product Security Division joined the meeting and had Zhang turn in his two work phones and his laptop. After the meeting, Apple reviewed Zhang’s past network activity, performed a forensic analysis on his work devices, as well as his “activities on the Apple campus,” including swipe badge access and closed circuit TV footage.
The company’s security team discovered that Zhang’s network activity “increased exponentially compared to the prior two years of his employment” in the days before his attempted resignation, and that the majority of that activity was “bulk searches and targeted downloading copious pages of information” from confidential databases that he had access to. The CCTV footage that Apple reviewed showed, according to the complaint, Zhang leaving the company’s autonomous vehicle lab on April 28th (during time when he was supposed to be on leave) carrying a “computer keyboard, some cables, and a large box.”
Apple says Zhang was caught on CCTV leaving the company’s autonomous vehicle lab with a box of equipment
Apple security teams confronted Zhang with this information in a follow-up meeting on May 1st, and the company says he admitted to taking data and removing items, including circuit boards and a Linux server, from the autonomous vehicle lab. He told Apple that he was pursuing a job at Xpeng, and said that he had also Air Dropped data to his wife’s laptop. After he consented to a search of that laptop, Apple found approximately 40GB of data, 60 percent of which its forensic teams said was “highly problematic.”
Zhang was “voluntarily terminated from Apple” on May 5th, per the complaint. The company says that after this, Zhang claimed to work for Xpeng, though it’s unclear if he ever did. Representatives for Xpeng and Alibaba could not be reached for comment in time for publication.
Apple alerted the FBI of its findings in May, and the agency in turn obtained a search warrant for Zhang’s home. The FBI searched his home on June 27th, and when the agency interviewed Zhang that day, he admitted to the same things that he had told Apple, according to the filing.
On July 7th, the FBI learned that Zhang had bought a round trip ticket from San Jose, California to Beijing, according to the complaint. Federal agents arrested Zhang after he passed through the security checkpoint at San Jose International Airport.