Apple: Employee stole self-driving project blueprint

A former employee of Apple has been charged with stealing trade secrets. 

Mr. Xiaolang Zhang, formerly a Hardware System Engineer for Apple, has been accused of stealing trade secrets by the FBI. According to the court documents, details of which can be found on BBC, the engineer was hired by the Cupertino company to work on the self-driving vehicle project, internally known as Titan. In 2018, after a visit to China for the birth of his child, he made public his desire to leave Apple and move back to his home country to work for Xiaopeng Motors. Xiaopeng Motors is a Chinese startup which is known for building a Tesla clone - it recently raised a $350m funding round led by Alibaba and Foxconn.

As Apple claims in its court documents, as soon as the formerly Apple engineer made his intentions known, the iPhone maker's security team was informed accordingly. After Zhang returned his company-loaned Apple devices, the security team uncovered that "copious pages of information" had been downloaded from secret databases. Furthermore, camera footage revealed that the engineer had entered the self-driving lab during his paternity leave, a move that is not permitted, according to internal regulation; he admitted to removing hardware from the lab without permission. The information obtained by the accused engineer included a 25-page blueprint for a self-driving circuit. It is also reported that the accused used Apple Airdrop to transfer some of the obtained information to his wife's Apple computer.

As Mercury News reports, Mr. Zhang was arrested last Saturday, after booking a last-minute round-trip ticket to Hangzhou, China from Mineta San Jose International Airport in California. The charges he faces carry a prison sentence of up to 10 years and/or a fine of up to $250,000. 

The alleged trade secret theft is reminiscent of the incident that sparked the infamous Waymo v Uber litigation; Anthony Levandowski, a self-driving engineer, allegedly stole trade secrets (in the form of data amounting to almost 10GB) pertaining to Waymo's configuration of the LIDAR system for their autonomous vehicles. He then founded Otto, a self-driving truck startup which was eventually acquired by Uber for $680m. The lawsuit was settled, with Waymo receiving an equity stake in Uber, worth approximately $230m at the time. Given that Apple has been particularly secretive about its self-driving efforts, it will be interesting to see how they manage the potential leak of their long-held "autonomous" secrets. 

A panel of Yahoo Finance experts discussed the potential repercussions for Apple this morning.

Photo Credit: Daniel Lu

Andrew Kyprianides