Z.ai founders worked on research funded by China institute that Britain tied to spies
AI
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Britain → work → spies
Four founders of one of China’s most promising artificial intelligence companies, Z.ai, worked on research in a joint project with a technology institute that the British government accused of having “very strong ties” to China’s main spy agency, according to publicly available research papers from China and an “espionage alert” from Britain.
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government → work → Britain
The nearly four-year AI research project, which overlapped with the company’s start in 2019, was co-funded by Beijing-based China General Technology Research Institute (CGTRI) and the National Natural Science Foundation of China, according to a previously unreported 78-page report that the project’s leaders compiled to detail their findings.
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leaders → overlap → findings
A CGTRI engineer and one of Z.ai’s founders were among the project’s leaders, and three other Z.ai founders contributed to the research, according to the report.
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founders → contribute → report
The report was published on a Chinese government website that provides research funding records.
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that → publish → records
Britain’s MI5 intelligence service, in the Sept 30 espionage alert, accused CGTRI of primarily existing to fund academic research that directly improves China’s main spy agency’s “technical capability for espionage”.
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that → accuse → espionage
The first-of-its-kind bulletin said the institute has “very strong ties” to China’s Ministry of State Security and warned of potential criminal consequences for “any institution or individual continuing to conduct research ultimately funded by CGTRI following publication of this espionage alert”.
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institution → say → alert
A spokesperson for China’s embassy in Britain called MI5’s allegations against CGTRI “baseless”.
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spokesperson → call → CGTRI
The Z.ai founders’ work on research partially funded by an alleged Chinese intelligence front highlights the risks cited by some US officials regarding China’s growing prowess in AI – and could add to further scrutiny of Z.ai in particular.
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work → fund → Z.ai
The two countries are racing to develop a technology that is transforming the global economy and could give their military services an advantage.
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that → race → advantage
The US restricted Z.ai’s access to American technology in 2025 based on allegations that the company aided the military with AI research.
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company → restrict → research
More recently, US officials accused the company of systemically extracting proprietary knowledge from American rivals.
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officials → accuse → rivals
It is not clear what, if anything, any of Z.ai’s founders may have known about CGTRI’s alleged relationship with Chinese intelligence.
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any → know → intelligence
The MI5 alert did not mention Z.ai.
Z.ai did not respond to e-mailed requests for comment, nor did the four founders involved in the research project.
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founders → mention → project
The company previously said the US decision to restrict its access to technology “lacked factual basis” and would not have a substantial impact on its business.
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decision → say → business
Reached by phone, a CGTRI representative said the institute does not do any external communication with anyone.
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institute → reach → anyone
Efforts to e-mail CGTRI for comment were unsuccessful.
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Efforts → e → comment
Liu Chang, a spokesperson for the Chinese embassy in Washington, declined to address specific questions about Bloomberg’s report.
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Chang → decline → report
“I’m not familiar with the specifics,” he said.
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he → ’m → specifics
“The development of AI in China comes from greater self-reliance and strength in science and technology.
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development → come → science
China advocates AI for good.
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China → advocate → good
We firmly oppose attempts to throw mud at China by distorting facts.”
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We → oppose → facts
A White House spokesperson referred questions about Z.ai to the Commerce Department, which declined to comment.
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which → refer → Department
In an indication of the importance of AI to US intelligence, President Donald Trump in October appointed Jay Clayton, the director of national intelligence, as his new AI czar.
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Trump → appoint → czar
In-Q-Tel, an independent non-profit investment firm set up by the Central Intelligence Agency in 1999, has made AI-related investments as part of its focus on start-ups used by the military and intelligence agencies.
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Tel → set → military
Chinese AI models have gained in popularity because they are cheaper than US rivals and are closing the performance gap.
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they → gain → gap
In the last year, however, US AI labs OpenAI and Anthropic have raised concerns about Chinese rivals including Z.ai, DeepSeek, Moonshot and MiniMax allegedly extracting data from American models to try to reproduce some of those capabilities through a technique called distillation.
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rivals → raise → technique
It is a practice that is common across the industry, but violates terms of service when used to create a competing technology.
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that → violate → technology
OpenAI and Anthropic have warned that models created through this method often lack safeguards designed to block misuse of cyber and biological capabilities.
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models → warn → capabilities
The Chinese companies have not responded to the allegations, though China’s Ministry of Commerce denied intellectual property violations and threatened to take all necessary measures to respond to actions that harm its interests.
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that → respond → interests
The project involving CGTRI and the Z.ai founders ran from January 2018 through December 2021 and had a total approved project budget of 2.94 million yuan (S$563,000), according to the researchers’ report.
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project → involve → report
It sought to develop AI tools to analyse social media posts, spot key events and map peoples’ connections, according to the researchers’ report.
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It → seek → report
A key goal of the project was developing a knowledge base of “China-related key persons”, according to the report, which did not elaborate on who such people would be.
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people → develop → report
James Mulvenon, who leads intelligence research and analysis at Virginia-based Pamir Consulting, a national security contractor, reviewed the researchers’ report at Bloomberg’s request.
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who → lead → request
He said the project involved research with both military and civilian uses that seeks to revolutionise how people use AI to identify and track specific individuals.
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people → say → individuals
China’s Ministry of State Security “had an obvious interest in funding this research and reaping the targeting benefits”, said Mulvenon, co-author of a book on Chinese industrial espionage.
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Mulvenon → have → espionage
Z.ai, also known as Zhipu, was spun out of research done at China’s elite Tsinghua University.
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Z.ai → know → University
The company has received backing from local governments in China, as well as tech giants including Alibaba Group and Tencent, Bloomberg has reported.
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Bloomberg → receive → Group
In January, Z.ai became the first major Chinese generative-AI start-up to go public with its Hong Kong listing.
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Z.ai → become → listing
Its shares have outperformed Hong Kong’s Hang Seng Index, rising more than 300% since its initial public offering versus a 6% decline in the benchmark.
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shares → outperform → benchmark
…and 15 more, not listed.
The Aporia
