New Report Reveals Self-Driving Truck Startup’s Data Transfer to China
According to a recent article by The Wall Street Journal, self-driving truck startup TuSimple, now known as CreateAI, sent sensitive data to a Beijing-owned firm, Foton, after agreeing to a national security agreement with the U.S. government. The data transfer, which effectively shared the blueprint of an American-made autonomous vehicle system, occurred in February 2022, just a week after TuSimple committed to ceasing such transfers.
The agreement required TuSimple to separate its business and technology from China-based employees and partners, but the data sharing with Foton continued until the deadline for compliance six months later. While an investigation by the Committee on Foreign Investment in the U.S. (CFIUS) found that the data sharing did not technically violate the agreement, TuSimple faced fines for other infractions and paid a $6 million settlement without admitting fault.
Despite efforts to reach TuSimple, now operating as CreateAI, for comment, JS was unsuccessful. This incident highlights the challenges of balancing foreign investment with national security in the tech industry.
Notably, this revelation follows previous controversies surrounding TuSimple, including attempts by shareholders to prevent the transfer of U.S. funds to a Chinese subsidiary for AI animation and content generation. Co-founder Xiaodi Hou’s legal battle for control over his voting shares to push for liquidation of the company adds to the ongoing drama.
After facing internal struggles and federal investigations, TuSimple made the decision to exit U.S. operations and delist from the stock market in January 2024. The company’s rebranding to CreateAI aimed to restart self-driving operations in China, but challenges related to the CFIUS agreement and court orders hindered these efforts.
The Journal’s report also sheds light on TuSimple’s ties to Hydron, a Chinese hydrogen trucking startup co-located with TuSimple China. The overlap between the two companies raised concerns during the CFIUS probe, revealing that TuSimple employees had shared confidential information with Hydron.
Documents reviewed by the Journal indicate that TuSimple facilitated a deal between Hydron and Foton in 2021 to develop autonomous trucks. Foton, a subsidiary of state-owned BAIC Group, collaborates with a Chinese military university on AV technology.
Technical instructions for server dimensions, brake designs, sensors, steering, power supply, and chips were shared with partners through various communication channels, including emails, Slack messages, and video calls. Employees also downloaded autonomy source code developed by their American counterparts, raising concerns amid escalating geopolitical tensions.
As the U.S. government reevaluates its approach to Chinese-linked tech deals, TuSimple’s experiences serve as a cautionary tale, prompting stricter regulations and heightened scrutiny of high-risk transactions in the industry.
