UK chip designer denies accusations of AI technology transfers to China

Imagination Technologies rejects insider claims its deals with Moore Threads and Biren Technology saw critical AI tech transferred to China

UK chip designer Imagination Technologies has denied striking deals that could’ve seen high-end AI chip technology transferred to two Chinese semiconductor firms, Moore Threads and Biren Technology, sanctioned by the US in 2023.

The two Chinese companies specialise in AI, but prior to the 2023 blacklisting had acquired intellectual property licences from Imagination that saw the transfer of technology from the Hertfordshire company.

The allegations were made by a pair of whistleblowers who claim that the company had struck licensing deals with the two companies that were so comprehensive they could’ve ripped-off every aspect of Imagination’s technology.

In a carefully worded statement, a spokesperson for Imagination told The Guardian: “At no stage has Imagination (or its owners) considered or implemented transactions with third parties with the aim of [our italics] enabling China or any other nation state to use or direct Imagination technology for state or military end uses.”

They went on to say – in a claim that many people might describe as “naive” – that while the licences existed no deliberate transfer of IP from the companies, backed by a private equity fund owned by the Chinese state, to “deliberately transfer” its key technology IP to China.

But the two whistleblowers claim otherwise. They say that the “knowledge transfer programmes” that were written into the licences were so broad that Moore Threads and Biren Technology specialists could almost certainly replicate the whole technology stack.

Moreover, under China’s 2017 National Intelligence Law all citizens and organisations are legally obliged to cooperate with intelligence services – the terms and conditions of a licensing agreement are irrelevant.

Nevertheless, the British government allowed Canyon Bridge, a Chinese private equity firm to acquire Imagination Technologies in 2017 after the US had blocked it from taking over US chipmaker Lattice in a $1.3 billion deal. Then-prime minister Theresa May, however, wanted to “intensify the golden era in UK-China relations” and waived through a £550 million deal with Imagination.

Three years later, the private equity firm sought outright control of the board of the company with the appointment of four new directors, and the transfer of its domicile to mainland China. Further fuelling suspicion over the intentions of Imagination’s owners, three senior executives also resigned citing concerns about the future direction of the company.

"I will not be part of a company that is effectively controlled by the Chinese government," chief product officer Steve Evans reportedly wrote in his resignation letter. He had followed CEO Ron Black and chief technology officer John Rayfield out of the door.

That crisis blew over following intervention by MPs.

However, the UK government did not demand a divestiture of Imagination by its Chinese private equity owners.

Instead, the strategy shifted to a full-blown technology transfer programme, according to the whistleblowers, both to transfer Imagination’s technology to Chinese companies, as well as pressure on engineers to teach Chinese counterparts the details of Imagination’s technology. The company, for its part, argues that the arrangements were “entirely normal” and “limited in scope”.