A former CIA officer with more than two decades of experience tracking Chinese economic espionage told the Senate Judiciary Committee on Wednesday that the threat is far worse than most Americans realize, and that a convicted Google engineer’s case proves it.
Tom Lyons, the ex-intelligence official, told lawmakers that former Google software engineer Linwei Ding, also known as Leon Ding, stole thousands of pages of confidential AI-related data from the tech giant, then used that stolen technology to build his own startup and court investors in China. Federal prosecutors secured a conviction in January on multiple counts of economic espionage and theft of trade secrets, making it one of the first major U.S. convictions tied to artificial intelligence espionage.
The hearing laid bare a gap that should alarm every American taxpayer and business owner: U.S. companies are expected to defend themselves against a foreign government’s full-spectrum intelligence operation, largely without federal help.
Evidence presented at trial showed that Ding downloaded sensitive data on Google’s AI infrastructure and uploaded it to a personal account. While still employed at Google, he secretly worked with China-based tech firms and launched his own startup. Prosecutors said his goal was to build AI systems in China and attract investors using technology he had no right to take.
The case was tried in federal court in California. The conviction in January marked a rare instance in which the Justice Department successfully prosecuted AI-related espionage, a category of theft that U.S. officials warn is accelerating as artificial intelligence becomes the defining technology race of the century.
Lyons pointed to the Ding prosecution as Exhibit A in a broader pattern. But his testimony made clear that individual criminal cases, however significant, are not enough to match the scale of the problem.
Lyons, drawing on more than 20 years of experience in the U.S. government and private sector focused on Chinese economic espionage, did not mince words before the committee. He framed the competitive landscape in terms that should make Silicon Valley, and Washington, sit up straight.
Fox News Digital reported that Lyons told senators:
“American firms are not competing against Chinese rivals in any normal sense. They are competing against the largest intelligence apparatus in the world, one whose mission includes putting American companies out of business.”
He drove the point further with a comparison designed to strip away any illusion of a level playing field:
“This is not GM versus Ford. This is a U.S. startup versus the resources of China’s military, the People’s Liberation Army.”
That framing matters. It redefines the conversation from “corporate competition” to “state-backed aggression.” And it raises an uncomfortable question: why is the federal government still treating this like a private-sector problem?
Congressional oversight of national security threats has taken on new urgency in recent months. Lawmakers have also pressed federal agencies on the deaths and disappearances of scientists with ties to U.S. nuclear and aerospace secrets, underscoring how deeply foreign espionage concerns now run across multiple sectors.
Lyons cautioned that the current U.S. approach leaves companies largely on their own to counter state-backed threats. His testimony argued that cases like Ding’s illustrate a wider gap in how the federal government responds to economic espionage, a gap that benefits Beijing every day it remains open.
His sharpest line cut to the core of the policy failure:
“If a foreign military were conducting operations on American soil, we would not ask our companies to fund their own defense.”
That analogy is hard to dismiss. If the People’s Liberation Army were physically entering American factories and walking out with blueprints, the response would be immediate and overwhelming. But because the theft happens through digital downloads and covert partnerships, the urgency somehow fades.
U.S. officials have long argued that Chinese intellectual property theft has cost the American economy billions of dollars in revenue and thousands of jobs, posing a significant national security risk. Yet the enforcement posture has never matched the rhetoric.
The FBI has separately alerted Congress to a China-linked cyber breach classified as a “major incident,” adding another dimension to the espionage threat that extends well beyond trade-secret theft.
President Donald Trump has made AI a cornerstone of his policy agenda, calling for a single federal regulatory framework instead of a patchwork of state laws. His administration has also pushed to accelerate data center development and strengthen U.S. competitiveness against China, a posture that treats the technology race as inseparable from national security.
Lyons’s testimony aligns with that approach but pushes further. His argument, in essence, is that regulatory streamlining and infrastructure investment are necessary but not sufficient. Without a coordinated federal effort to shield American companies from state-sponsored theft, the technology being developed in those new data centers will end up in Chinese hands anyway.
The pattern is familiar. Washington has spent years documenting the scope of Chinese espionage while doing relatively little to change the structural incentives that make it so easy. Investigations into government overreach in other contexts have shown that federal agencies are perfectly capable of aggressive action when they choose to be. The question is whether that energy will ever be directed at the foreign adversary draining American innovation.
The Ding conviction is a win, but a narrow one. One engineer caught, one case prosecuted, one company victimized. The broader architecture of Chinese economic espionage, the intelligence officers, the front companies, the talent recruitment programs, the cyber intrusions, remains largely intact.
Lyons’s two decades of experience give his warnings weight. He is not a politician looking for a headline. He is someone who spent a career inside the system that is supposed to counter these threats, and he is telling Congress the system is falling short.
Republican senators have shown increasing willingness to confront institutional credibility gaps in intelligence and law enforcement. Sens. Chuck Grassley and Lindsey Graham previously raised serious concerns about how the FBI handled sourcing and credibility in the Steele dossier matter, with Grassley and Graham writing that “Clinton associates were contemporaneously feeding Mr. Steele allegations”, a reminder that accountability for intelligence failures cuts across multiple fronts.
The common thread is a federal apparatus that too often misdirects its resources, aggressive when it comes to domestic political targets, passive when it comes to foreign adversaries systematically looting American companies.
Meanwhile, Senate Republicans continue to press for stronger enforcement across multiple policy areas, from border security to trade protection. The AI espionage threat fits squarely into that broader push for a government that prioritizes the safety and prosperity of American citizens and businesses over bureaucratic inertia.
The Senate Judiciary Committee hearing puts the issue on the record. Whether it leads to meaningful policy change is another matter. Lyons told lawmakers the deck is stacked against American companies. The evidence supports him.
A Google engineer stole thousands of pages of AI secrets, built a company with them, and got caught only after the damage was done. The conviction is welcome. But one prosecution does not equal a strategy.
If the United States is serious about winning the AI race against China, it cannot keep asking American companies to fight a foreign military alone, and then act surprised when they lose.
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