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.

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.”

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