How Self-Driving Truck Startup TuSimple Siphoned Trade Secrets to China

Summary

WSJ Tech News Briefing: How Self-Driving Truck Startup TuSimple Siphoned Trade Secrets to China

Release Date: May 28, 2025
Host: Victoria Craig
Author: The Wall Street Journal

The latest episode of the WSJ Tech News Briefing delves into two major stories shaping the technology landscape: the controversial use of artificial intelligence in apartment rental pricing and a high-profile case of technology transfer from a self-driving truck startup to China. Hosted by Victoria Craig, the episode features insights from WSJ reporters Rebecca Pichotto and Heather Somerville, providing an in-depth analysis of these critical issues.

AI-Driven Rental Pricing and RealPage's Legal Battles

The episode opens with a discussion on the rising use of artificial intelligence (AI) and algorithmic pricing systems in setting apartment rental prices across major U.S. cities like Philadelphia and San Francisco. These systems, employed by companies like RealPage, have sparked controversy and legal challenges.

Rebecca Pichotto explains, “RealPage is a software firm that has a bunch of data about rentals all across the US and compiles that data into an automated algorithm to show landlords how certain rental prices affect rental demand and in doing so offers suggestions to landlords on how to set their prices” (02:13). However, the AI-driven approach has led to allegations that RealPage’s algorithms facilitate price collusion among landlords, effectively enabling them to increase rents collectively.

Federal, state, and private plaintiffs accuse RealPage of using proprietary data to manipulate rental prices. In response, RealPage denies any antitrust or consumer protection violations, asserting that their pricing recommendations are merely suggestions that landlords are not obligated to follow. “They say that their pricing recommendations are just that, suggestions. And so landlords don't have to take them. And in turn, that doesn't qualify as price fixing or collusion” (02:19).

The situation took a turn with the passage of a significant tax bill in the House, which includes a provision that could impact RealPage’s operations. This provision, added by House Republicans, aims to ban state and local officials from regulating AI models and automated algorithms for 10 years, potentially shielding companies like RealPage from local restrictions on rent-setting algorithms. “Tucked away in what Trump is calling his big beautiful bill is a provision that House Republicans added to essentially ban state and local officials from regulating AI models and automated algorithms for 10 years” (02:58).

However, this federal provision does not address ongoing lawsuits based on antitrust and consumer protection violations. RealPage faces substantial financial risks, with potential monetary damages amounting to $73 billion across various lawsuits. Additionally, local and state governments may retaliate by enhancing other tenant protection measures, such as increasing rent control limits.

Victoria Craig questions the future viability of RealPage amidst these challenges. Rebecca Pichotto responds, “RealPage could definitely breathe a sigh of relief if they're able to function in markets that they've been essentially banned from. But they're facing monetary damages… It’s already affecting the business” (04:40). The legal battles and the uncertainty surrounding regulatory provisions pose significant threats to RealPage’s business model and operational continuity.

TuSimple’s Transfer of Autonomous Driving Technology to China

Shifting focus, the episode scrutinizes the case of TuSimple, a U.S.-based autonomous driving startup that became embroiled in a scandal involving the transfer of critical trade secrets to China. Heather Somerville provides an exclusive report revealing how TuSimple allegedly shared its comprehensive autonomous driving stack with Chinese companies, notably the Beijing-owned firm Photon.

In 2021, TuSimple achieved a milestone by operating a truck autonomously for 80 miles in Arizona. However, by 2023, the company had shut down its U.S. operations, auctioned its trucks, and delisted from NASDAQ. Heather Somerville details, “TuSimple shared with Chinese companies what amounted to a full autonomous driving stack. So this included the source code... hardware, the integration of all of these systems” (06:34). This level of technology transfer is significant, as developing a functional autonomous driving system requires seamless integration of hardware and software components.

Despite signing a National Security Agreement with the U.S. Government in February 2022, which mandated stringent controls on sharing technology with Chinese entities, TuSimple transferred substantial data to Photon just a week after the agreement. “That agreement… required that TuSimple separate its business and all its technology from China based employees and China partners… But it was just about a week after signing that agreement that TuSimple transferred a trove of data to a Beijing owned firm” (07:42).

In response to these actions, TuSimple’s co-founder Xiaodi How claimed that no prohibited information was shared. Nonetheless, the Committee on Foreign Investment in the United States (CFIUS) fined the company $6 million for infractions, although they did not find a direct violation of the National Security Agreement. “Tusimple ended up paying $6 million to CFIUS without admitting fault” (08:38).

Further investigations by the FBI, SEC, and Commerce Department led to referrals for possible theft of trade secrets and espionage charges against TuSimple’s leadership. However, despite these probes, little substantial action has been taken. As Heather Somerville reports, “The company paid $6 million to CFIUS for certain infractions. We don't know the precise status of other investigations… the leadership moved on to do other things” (09:33). Former executives have since relocated to China, continuing their work in related technological fields, thereby raising concerns about the effectiveness of U.S. laws in preventing such technology transfers.

U.S. Government’s Response and Future Implications

The episode highlights the frustration among government officials regarding the loopholes in U.S. laws meant to safeguard critical technologies. Heather Somerville points out that while the Trump administration reinforced the importance of technology in national security and economic competition with China, existing export controls are inadequate for emerging technologies like autonomous driving. “We have this realm of export controls which tell companies they can't share or sell their technology to places like China. And we have this huge array of other technology that isn't really covered by laws or regulation” (10:42).

To address these gaps, the U.S. government has established new offices within the Commerce Department to enforce stricter prohibitions on Chinese technology in the U.S. market. These measures aim to prevent the sale of sensitive technologies to Chinese firms, although the effectiveness of these initiatives remains to be seen.

Conclusion

The WSJ Tech News Briefing episode provides a comprehensive analysis of two significant issues in the tech industry: the ethical and legal challenges posed by AI-driven rental pricing systems and the national security implications of technology transfer to foreign entities. Through expert reporting and insightful commentary, the episode underscores the delicate balance between technological innovation and regulatory oversight, highlighting the ongoing struggles to protect critical technologies and maintain fair market practices in an increasingly interconnected world.

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Notable Quotes:

• Rebecca Pichotto (02:13): “RealPage is a software firm that has a bunch of data about rentals all across the US and compiles that data into an automated algorithm to show landlords how certain rental prices affect rental demand and in doing so offers suggestions to landlords on how to set their prices.”

• Rebecca Pichotto (02:19): “They say that their pricing recommendations are just that, suggestions. And so landlords don't have to take them. And in turn, that doesn't qualify as price fixing or collusion.”

• Rebecca Pichotto (04:40): “RealPage could definitely breathe a sigh of relief if they're able to function in markets that they've been essentially banned from. But they're facing monetary damages… It’s already affecting the business.”

• Heather Somerville (06:34): “TuSimple shared with Chinese companies what amounted to a full autonomous driving stack. So this included the source code... hardware, the integration of all of these systems.”

• Heather Somerville (07:42): “That agreement… required that TuSimple separate its business and all its technology from China based employees and China partners… But it was just about a week after signing that agreement that TuSimple transferred a trove of data to a Beijing owned firm.”

• Heather Somerville (08:38): “Tusimple ended up paying $6 million to CFIUS without admitting fault.”

• Heather Somerville (09:33): “The company paid $6 million to CFIUS for certain infractions. We don't know the precise status of other investigations… the leadership moved on to do other things.”

• Heather Somerville (10:42): “We have this realm of export controls which tell companies they can't share or sell their technology to places like China. And we have this huge array of other technology that isn't really covered by laws or regulation.”

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This summary is based on the transcript provided and aims to encapsulate the key discussions, insights, and conclusions presented in the episode.

Transcript

[Rebecca Pichotto]

Tech leaders and boards are teaming up to transform businesses.

[Victoria Craig]

On the latest episode of techfluential Nationwide board members Sarah Tucker and Jim Fowler Nationwide EVP and CTO take us behind the scenes to show how it can be done.

[Rebecca Pichotto]

Techfluential, a podcast from Deloitte and custom content from WSJ.

[Victoria Craig]

Hey TNB listeners, before we get started, heads up. We're going to be asking you a question at the top of each show for the next few weeks. Our goal here at Tech News Briefing is to keep you updated with the latest headlines and trends on all things tech. Now we want to know more about you, we're what you like about the show and what more you'd like to hear from us. So our question this week is how often do you want new episodes and how long do you want em to be? Do you want shorter shows more often or longer shows less frequently? If you're listening on Spotify, look for our poll under the episode description or you can send us an email to tnbsj.com now onto the show. Welcome to Tech News briefing. It's Wednesday, May 28th. I'm Victoria Craig. The Wall Street Journal Finding an affordable apartment in a big city can be like spotting a needle in a haystack. But what happens when you add in artificial intelligence, algorithmic pricing systems, even legal battles? Then, one of America's biggest self driving truck startups shared sensitive data with China. We'll tell you how that's shaping the Trump administration's foreign investment rul. But first, using AI to crunch confidential data to set apartment rental prices has become a controversial topic in cities from Philadelphia to San Francisco. It's even led to dozens of lawsuits. But the tax bill that cleared the US House last week could throw companies like RealPage a lifeline, as WSJ reporter Rebecca Pichotto has been finding out. Rebecca, before we get into that, just help us understand how companies like RealPage work.

[Rebecca Pichotto]

Yes, RealPage is a software firm that has a bunch of data about rentals all across the US and compiles that data into an automated algorithm to show landlords how certain rental prices affect rental demand and in doing so offers suggestions to landlords on how to set their prices.

[Victoria Craig]

And the real issue with this is the AI part of this whole equation, right?

[Rebecca Pichotto]

Yes. So federal, state and private plaintiffs have accused railpage's algorithm of using proprietary data and crunching all of those numbers to help landlords basically collude on prices, see how their competitors are pricing, and then increase their rents. RealPage denies any allegations of antitrust or consumer protection violations. They say that their pricing recommendations are just that, suggestions. And so landlords don't have to take them. And in turn, that doesn't qualify as price fixing or collusion.

[Victoria Craig]

The tax bill that was passed by the House could actually throw a lifeline to RealPage. How would that work?

[Rebecca Pichotto]

Yeah, so tucked away in what Trump is calling his big beautiful bill is a provision that House Republicans added to essentially ban state and local officials from regulating AI models and automated algorithms for 10 years. So that would essentially gut some of the local and state efforts to ban rent setting algorithms like across the US.

[Victoria Craig]

And the thing is, when you read your story, it's a little bit whiplash inducing because there are all kinds of lawsuits that are already going on in local jurisdictions. This House Bill could help RealPage, but then also state and local governments have plans in the works to fight back against what that bill may do. So how does all that work? What kind of efforts are these local jurisdictions preparing for?

[Rebecca Pichotto]

The House provision specifically will make unenforceable the local ordinances banning RealPage, but the provision likely will not affect ongoing lawsuits based on antitrust and consumer protection violations that are against RealPage. So RealPage is facing up to $73 billion in monetary damages across those lawsuits, and that will still be fair game even if the provision is passed. That said local and state officials first line of defense would be to sue the federal government if this tax provision is passed. And another consequence might be that if officials can't regulate rent setting algorithms like RealPage, they'll turn to other tenant protection laws like upping rent control and leaning harder into other means of tenant protection.

[Victoria Craig]

And what does this mean for the future viability of RealPage's business and its ability to continue operating? Because you mentioned some of those lawsuits and the damages that it could cause for the company.

[Rebecca Pichotto]

Yeah, they're facing monetary damages. The DOJ wants to specifically adjust how RealPage's algorithm functions. Some landlords are already trying to create their own internal data systems away from railpage. You know, I spoke to one landlord who said that everyone he knows is scared to use railpage, so it's already affecting the business. That said, railpage could definitely breathe a sigh of relief if they're able to function in markets that they've been essentially banned from.

[Victoria Craig]

That was Rebecca Pichoto, who covers the residential rental market and housing policy for the Journal. Coming up, a US based company shared its best in class autonomous driving system with China and became an example of Washington's short shortcomings in keeping hold of critical technologies. We'll delve into some exclusive WSJ reporting after the break.

[Heather Somerville]

Optimism isn't sunshine and rainbows. It's fixing things, changing the way we fix things. It's running the world on smarter energy. Because if optimism never stops, then change can't either. GE the energy of change.

[Victoria Craig]

In 2021, the San Diego based company Tusimple set a record when its truck traveled 80 miles in Arizona without a human driver. But within a couple of years, the company voluntarily shut down its U.S. operations, auctioned off its trucks and delisted. From the NASDAQ. WSJ reporter Heather Somerville has obtained exclusive details that show too simple style siphoned trade secrets to Chinese companies, becoming the poster child for Washington's shortcomings in trying to keep critical tech and know how in America. Heather, you spoke to former employees and you've reviewed hundreds of pages of documents about how that transfer happened. Just walk us through the scale of what you found.

[Heather Somerville]

Tusimple shared with Chinese companies what amounted to a full autonomous driving stack. So this included the source code that would be effectively the brains of an autonomous truck, as well as numerous aspects of the design, the hardware, the integration of all of these systems. It's pretty difficult to just sort of slap an autonomous driving system onto a truck and make it work. All of these parts have to work together. You need a truck that is designed to accept a self driving system. And so in this data that Tusimple transferred included all of these components for this Chinese trucking company called Photon to build a self driving truck using TuSimple's autonomous system, which was developed by engineers in the United States.

[Victoria Craig]

Now Tusimple did sign a national security agreement with the US Government at one point. What did that mean for its ability to share information with Chinese companies?

[Heather Somerville]

That agreement, which was signed in February 2022, required that TuSimple separate its business and all its technology from China based employees and China partners with a variety of firewalls and governance controls. It was also required not to share any intellectual property such as source code. This was enforced by the Committee on Foreign Investment in the United States, or cfius, which is an interagency national security panel. But it was just about a week after signing that agreement that Tusimple transferred a trove of data to a Beijing owned firm. And what we reviewed in documents is that the sharing of technology continued between when Tusimple signed the National Security Agreement and its deadline to comply with that agreement six months later.

[Victoria Craig]

And what's been the response from Tusimple.

[Heather Somerville]

To your Reporting Tusimple co founder Xiaodi how, who left Tusimple in 2023, told us that no information prohibited by the company's National Security Agreement was ever shared with anyone. A CFIUS investigation ultimately determined that Tusimple's technology sharing hadn't violated the National Security Agreement, but it did fine the company for other infractions. That's according to a person familiar with the events. Tusimple ended up paying $6 million in a settlement to CFIUS without admitting fault.

[Victoria Craig]

And you point out in your story that company leadership was referred to the Justice Department for possible theft of trade secrets and espionage charges. The FBI, the sec, the Commerce Department also all opened their own investigations. What came of all of these probes into the company and its dealings?

[Heather Somerville]

Not very much. Many of the sources I spoke to who are aware of what Tusimple did and have worked deeply on national security issues are both flummoxed and really mad that things have played out this way. And ultimately what we know so far is that the company paid $6 million to CFIUS for certain infractions. We don't know the precise status of other investigations, but when it effectively dissolved, its leadership moved on to do other things. One of the co founders has another self driving trucking company operating in Texas with Chinese investment. And other leaders have moved over to China where they're building an AI for animation company.

[Victoria Craig]

Heather, the US Considers autonomous vehicle technology as a matter of national security importance. And this whole story has really frustrated current and former government officials, as you point out in your story, because it's shown the weakness of US Laws that are in place. So what has the US Government done to try to close some of those loopholes, can we call them, or problems in the laws?

[Heather Somerville]

It is top of mind for a lot of people in the Trump administration. Technology is integral to US national security because it's important to our competition with China. It's important to our economic security. And we have this realm of export controls which tell companies they can't share or sell their technology to places like China. And we have this huge array of other technology that isn't really covered by laws or regulation. We know it's important. Autonomous driving is one of these technologies. And a couple of things that are happening right now is there is an office inside of the Commerce Department that was set up actually under the first Trump administration that has taken a much more aggressive approach to outright prohibiting Chinese technology from certain companies or certain types of technology that comes from China from being sold in the United States.

[Victoria Craig]

That was WSJ reporter Heather Somerville. And that's it for Tech News Briefing. Today's show was produced by Julie Chang with Deputy editor Chris Inslee. I'm Victoria Craig for the Wall Street Journal. We'll be back this afternoon with TNB Tech Minute. Thanks for listening. ADP imagines a world of work where smart machines become too smart.

[Heather Somerville]

Copier. I need 15 copies of this printing.

[Victoria Craig]

By the way, irregardless. Not a word, Janet.

[Heather Somerville]

Yeah, I know. Page 6 should be regardless of or.

[Victoria Craig]

Irrespective of, just print them, please.

[Heather Somerville]

If it were a word, Janet, it.

[Victoria Craig]

Would mean without irregard, which is copier.

[Heather Somerville]

Switch to silent mode.

[Victoria Craig]

Let's put a pin in it. Anything can change the world of work. From HR to payroll. ADP helps businesses take on the next anything.