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Magic Leap Says Ex-Engineer Copied Headset for China (bloomberg.com)
177 points by guyhance 7 months ago | hide | past | web | favorite | 98 comments

Nreal optical hardware is closer to ODGs and very different to Magic Leap. Magic Leap acquired ODG patent portfolio recently (after effectively killing them via some backstabby acquisition shenanigans) and is now opportunistically patent trolling Nreal and the increasing amount of Chinese competition (Nreal has much better visual quality at a much lower price) using post rationalized accusations given current US-China climate. And on queue, Bloomberg Tech does a Bloomberg Tech on the story.

But the design looked very similar to proptotypes who were confidential.

He did more than "inspired by"

Could you elaborate on how Nreal is closer to ODG and different from Magic Leap?

> and is now opportunistically patent trolling Nreal

Are you making this up?

I don't see any patent claim being mentioned in the article.

I think he didn't mean that literally.

"Patent trolling" as in extorting someone who successfully implemented some idea just because I have some claim to comming up with vaguely similar idea first.

The article reports on the lawsuit, but is light on details about the headset. Tested recently did a 10 minute review on this headset, the 'Nreal Light' [1] https://www.youtube.com/watch?v=M9A9u-lwjTs

Regardless of the merits of the lawsuit, I can see why Magic Leap would be scared. The AR glasses looks great. They're certainly stylish enough for the mass-market -- they look like normal glasses at first glance, they're quite reasonably priced (at $500), and run from a regular Android phones via USB-C (for power, as well as sensor and video data).

For reference, here's the Tested review for current Magic Leap product, the Magic Leap One Creator Edition: https://www.youtube.com/watch?v=Vrq2akzdFq8. It retails for $2295. Though it comes with controllers, eye-tracking for focal accommodation, two waveguides displays that are used to provide two separate physical layers to focus on.

On the merits of the lawsuit, after reading the whole district court filing [1], the core allegation is that the 'Nreal Light' is based on Magic Leap's unproductized internal designs produced "after extensive investment of time (multiple years), money (hundreds of millions of dollars spent on research and development) and human resources (hundreds of engineers)", and that the defendant learned about the product designs and research during his employment, including adapting (as discussed elsewhere in this thread) Magic Leap's proprietary font (https://i.imgur.com/7pYZ8bp.png)

If Nreal Light is indeed based on Magic Leap's unreleased designs, this makes me very sympathetic to the price difference -- Magic Leap One is a development kit backed by 5+ years of huge R&D investment, and is/was never intended for end-users (hence the price and awful aesthetics).

The Nreal Light is an indication of what a consumer Magic Leap was going to be: a cheaper, slimmer, less ambitious product (by avoiding multiple waveguide displays) that appeals to a consumer market, then it's unfair and sad that they didn't have the opportunity to go to market with their own product.

On the other hand, Magic Leap has had ample opportunity to release an affordable high-quality AR headset so I do feel some sympathy in an employee leveraging legitimately acquired knowledge and experience to build a commercial product that beats its competitors. The situation may not that different to the Traitorous Eight, or Steve Jobs infamous "adapting" of design ideas of the Alto for the Apple Lisa and Apple Macintosh, after his visit to Xerox PARC.

[1] https://www.courtlistener.com/recap/gov.uscourts.cand.343717...

>Magic Leap alleges that Chi Xu, who left in 2016, exploited its confidential information to “quickly develop a prototype of lightweight, ergonomically designed, mixed reality glasses for use with smart phones and other devices that are strikingly similar” to the Florida-based startup’s designs.

>The startup alleges that Xu plotted during his roughly 13 months working there to launch his own competing company in China and “neglected his work duties” to acquire proprietary information.

While these are valid allegations to make, I'm not sure what IP "theft" has occurred. It sounds like Magic Leap is accusing Chi of looking at Magic Leap's designs and having the intention of launching a product in the same market and with roughly the same form factor - but crucially, does not allege that Chi exfiltrated any CI/trade secrets or infringed on any IP.

The second set of accusations is also kafkaesque, by the way, as they are accusing Chi of having the intent to launch a competing company by himself - something that many, many tech employees have dreamed of (and done) without ever being sued. I'm not sure what that allegation is there for, honestly.

but crucially, does not allege that Chi exfiltrated any CI/trade secrets or infringed on any IP

Their complaint alleges exactly that, repeatedly.

Nowhere in the complaint do they ever mention a single specific bit of technology, code, design or patent stolen by Chi Xu. Their entire argument is that he signed a confidentiality agreement when he started working there so should not be able to start a competing company. This is going to be next to impossible to enforce in California, let alone China.

A complaint isn't required to allege specific IP stolen. It's to allege general categories of IP stolen. Too much specificity limits the scope of the complaint and would require an amended complaint if more IP was stolen than originally alleged.

The next stage of the litigation process, discovery, is for determining the specific IP pilfered (if any).

The comment I'm replying to says that they don't allege he improperly took their confidential information. This isn't an accurate representation of their allegations. They do allege that, over and over. I don't have any opinions on (or much interest in) the merits of their case, but "they don't even say he took their CI" is not true. They quite plainly do. They say things like:

"in reality, the Nreal Light incorporates and derives from the Confidential Designs and other Magic Leap Confidential Information protected by the PIIA."

How are they supposed to know the extent of what was stolen without seeing the source code from the offending product? The reality is that a relatively insignificant employee up and left and had a competing product out the door in a very short period of time. Everything points to him stealing as much IP as possible and throwing a competing product together. Seems to be enough probable cause to justify an investigation.

And that their design is very similar to an internal confidential prototype.

Which says more about the situation.

Lessons learned from Magic Leap: don’t sign a non-compete agreement with your employee; you have to pay and it’s legally not enforceable in California. Ask your employee to sign a board confidentiality agreement and sue him if he works for a competitor.

Also, I wonder if people would think differently if this case is about a Facebook employee left to work on a social media App like google+.

Possibly, but copying a web app is substantially simpler than copying AR tech. Considering magic leap was stealth with hundreds of millions in R&D, I would put it in a different category than making a similar web app.

I’m pretty sure Facebook backend is a lot more sophisticated than Magic Leap. I’m using Facebook as an example so that our judgements won’t be biased by the current sino-US tech climate.

> stealth with hundreds of millions in R&D

Wow. That number sounded high since I'm very unfamiliar with the space but according to crunchbase [1] they took in 2.6B in funding overall. Before this headset they mainly put out a few iterations of that gesture input device, right?

[1] https://www.crunchbase.com/organization/magic-leap

Leap Motion and Magic Leap are two different companies. The only thing Magic Leap seem to be doing is the headset, and that took them 2.6B funding and turned out to be at about the same level of tech as already existing products.

Leap Motion (which did the gesture recognition input stuff) was recently sold at about a 10th of their peak valuation ($30M price from $300M valuation about 2 years ago).

I interviewed at Magic Leap a few years ago and it was never explained to me how they were differentiating themselves from competitors or what their valuation was based on.

I declined the position based on the fact that their options were already diluted without a product or revenue stream.

Maybe one day I will regret that decision when they get bought by Apple, but I just don't see it happening.

I think their hope currently is to get bought for a boatload of money, but even if they are, it's hard to see they would keep their valuation. Personally I think of Magic Leap sorta like Juicero: overfunded, overpromised, and thought the market would magically appear at launch.

Summary of the evidence presented in the complaint:

1) Using the same proprietary font in their logo was a really dumb idea:

> https://i.imgur.com/7pYZ8bp.png

2) Alleges he engaged in internal meetings "outside the scope of his work at Magic Leap" in order to gain useful information, while simultaneously neglecting his duties at work as he planned to start his own company in China. Before launching a product that looks and functions very similar to the Magic Leap product within a 2yr timespan (quitting in mid-2016, started in 2017, launched in 2019) while Magic Leap has been at it since 2010.

3) Their primary evidence seems to be some useless "Private Information" confidentiality form we all sign

4) The other is some Youtube interview the Nreal founder did where he openly admitted to being inspired by his work at Magic Leap:


Where he basically said that Magic Leap was being too ambitious with an "impossible" goal of trying to put it all in one small device... and he wanted to utilize Chinese manufacturing pipelines to build the same thing but much simpler by utilizing existing smartphone and laptop tech.

5) Finally another section compared demos by both companies, both involving whales:

Magic Leap's whale demos:

> https://www.youtube.com/watch?v=LM0T6hLH15k

> https://www.youtube.com/watch?v=PyCoTzRzHxo

Nreal's twitter picture demo:

> https://i.imgur.com/jPIGMkf.png

That's about it. Points 2) and 3) get repeated ad-nauseam and not very convincingly IMO.

The meat of the complaint IMO is paragraph 22.

> The resulting product, as demonstrated at CES and on publicly available videos, bears a striking similarity to the Confidential Designs that Magic Leap had under development before and during the time that Mr. Xu worked at Magic Leap, but which were not ultimately commercialized or publicly released.

> Using the exact same proprietary font in their logo was a really dumb idea

It’s not the same font. Similar but not the same. Look at letter L and A. They are different

"e" and "a" are the same but the "L" by Nreal is custom. Additionally the "n" in Nreal looks like half of the "m" in Magic.

Only the "Nreal" part is using the font FYI and only 3 letters directly overlap (e, a, l).

Magic Leaps offers a similar font LominoUI on their site but it isn't entirely the same as the logo font:


A is not the same. It looks similar but the cut on the bottom has different angle. Also looking at it closer, even E is not the same. In magic leap the top cutout is bigger than bottom one, in nreal they have the same, equal size.

Oh come on, that logo type is extremely derivative of the Magic Leap one. n/m e, and a were essentially copied. They don't have to be exact copies to be stolen.

I'm very pro-theft in design as a learning and inspiration tool but it's extremely stupid when you both copy the logo font while also doing similar IP, when the cofounder worked there previously. It makes it look like they were baiting Magic Leap to complain. Even if the initial complaint is overall quite weak and the whole thing is probably futile.

> They don't have to be exact copies to be stolen.

A font would be covered under copyright so....I mean....legally, they do have to be exact copies, yes. And this one is not, so the entire discussion of the font seem legally irrelevant.

But it's certainly not helping. It amplifies the derivative nature of the whole operation, right from the branding level to the product, regardless of exact legal implications.

This stuff matters in personal legacy, industry/media respect, and ultimately branding too. Unless they were purposefully going for the Chinese knock-off look.

Why on earth does a pre-revenue startup need a proprietary font design?

I asked this very same question while I was there during its development. The answer was "its a badge of honor". Ugh.

This is a complaint...it's the first step in a very long process of litigation.

In order to get to the next stage of litigation, it needs to allege just enough facts to make a "prima facie" showing (i.e., that it establishes at least some evidence of each claim).

If it makes that hurdle, the case proceeds to discovery, which is where both sides turn over documents, depose witnesses, etc., to determine the actual IP stolen (if any).

TLDR: it doesn't matter if the complaint is convincing. It's just the first step.

Shouldn't they be busy building a product that people want instead?

I can't help but think that insiders who knew the product was doomed to fail are breathing a sigh of relief that the blame for the killing blow won't land on them.

Things like this is what prevents capable inventors from taking the necessary risk to develop a truly innovative product. My wish is for there to be better legal protection for entrepreneurs bringing new products to the market, in order to encourage innovation and long difficult r+d work.

My heart sinks every time I hear a story of copycats profiting off of the work of someone or some company that sank tons of hours and dollars into developing a unique product - going up down left right backwards forwards upside down right side up headfirst ass backwards - just to find a solution, and then to have all that effort once you’ve found the answer, be pulled from right under your feet because someone can do it better now that the answer has been discovered (because you put the hours to discover it). That’s just ducking awful. I remember seeing [this](https://www.google.com/amp/s/www.theverge.com/platform/amp/2...) about a simple product and it made me so furious. The reality is it’s happening everywhere.

China and Chinese culture of designer knockoffs and blatant copycatting needs to start playing fair and follow the same laws as everyone else if they expect to deal respectably in international markets.

I’m wondering if with things like even the font being the same, wether or not the act of copycatting even registers as an offense to the people who do this.

And to make it clear my stance isn’t against Chinese people, some of my favorite people in this world are Chinese, it’s against a government that condones and does little, or turns a blind eye when a company is doing the equivalent of removing padding from a boxing glove. If we can’t resolve something like this through verbal communication and legal action what other options do we have?

Edit: Deleting this comment. I don't know enough about the subject matter to speak as confidently as I was.

I understand where you're coming from but the difference is that Theranos claims were literally impossible due to how human skin and circulatory system works. Whereas Magic Leap AR is only extremely difficult. If they throw enough billions at it they might eventually ship something that sort of works.

While your comment has merit, I think it’s unfair to compare Magic Leap to Theranos. One did actual bloodwork on people and fucked with your health...the other promised a whale jumping in a gym...

Business practice/promise aside, Theranos had the ability to negatively influence a person’s health. Magic Leap can only under deliver.

Magic leap has released something (although it’s not that amazing). It’s assumed that what is shown to investors is much too large for a consumer product but the promise is that they will someday get the tech to a consumer level.

I doubt they’ve been faking anything to investors like Theranos.

Magic Leap actually have a product and it's actually pretty damn good at what it does. What they don't have is revenue. There just isn't a big enough market for mixed reality headsets.

What they sell is not the product that they teased. People got excited by their amazing promises of light beamed to your eyes and we got a lackluster Hololens bis. Bait&Switch

> “Whereas Nreal purported to develop its Nreal Light product in under two years, Magic Leap developed its technology after extensive investment of time (multiple years), money (hundreds of millions of dollars spent on research and development) and human resources (hundreds of engineers),” according to the complaint.

I have no real opinion on the allegations, and if true they are serious but...

...I find it a bit hilarious that Magic Leap, a company that has been widely criticised for over promising, under delivering, having extremely basic tech which is itself quite close to the tech of competitors, and which is well known for spending an eye watering amount of money and time in order to obtain very little results would offer this as a supporting argument.

Just because Magic Leap spent two billion and 7 years doesn't mean a competent engineering team couldn't do it a lot faster with a lot less money. :) (Especially with entirely legitimate access to Magic Leaps hardware, and with the benefit of years more published research across the industry.) I hope Magic Leap has some better arguments than they managed to get published in Bloomberg, because what's in the article is just hand wavy nonsense.

The optics of this aren't great for Magic Leap. AR pun not intended. Really all this does is present Nreal as a legitimate threat to a company that raised approx 100x more money* before shipping a product.

(* Magic Leap funding $2B+, nreal $16M ish)

I don't want to take any position on either Magic Leap as a product/company or on this lawsuit, but it's not at all unusual for R&D to cost far more than production. This is how drug development works: someone spends billions researching and developing a drug and gets a temporary monopoly on production. Once competition is allowed and prices are competed down to the marginal cost of production the generics are close to free in comparison to the original branded product.

So "Nreal copied Magic Leap's product after Magic Leap sank billion into R&D" is an entirely plausible explanation for the comparable results despite the dramatic gap in funding.

I mean, I’m not arguing that there is no plausible explanation for Magic Leap’s inability to ship a product with only $1B in funding. The plausible explanation is that they are running a tech startup like a drug development company, to use your analogy, which is just a terrible way to do startups.

AR/smartglasses is not a market where you will have “generics” any time soon. You’re going to have the iPhone of smartglasses which will dominate, and then everyone else will try and fail to copy. Like Facebook dominating social, then google+ failing. Or iPhone vs Android, although Android did finally manage to achieve market share thanks to googles muscle.

Tl;dr: successful startups don’t raise billions of dollars before shipping a product as mediocre as ML’s v1.

And removing the mistakes made my Magic makes the derivative cost less; Magic used a lot of money figuring out what doesn’t work, money that the competing company did not have to spend. If I make an iPhone copy, I didn’t have to spend all the money Apple spent figuring out what wouldn’t work. So it’s not an apples to apples comparison.

They also used a lot of that money to develop a 'premium' aspirational product.

I never heard of Nreal and went to their website but did not find any demos of the product. Here's an execellent youtube video demoing their product - https://www.youtube.com/watch?v=M9A9u-lwjTs

Chinese have a good grasp of add-on innovation. Give a base product and they'll pad it with all manner of features to make it a very marketable product. Look at DJI's action camera's, drones, etc. I'm not even going to touch on the age old conflict in combating apparel clones in China town.

I have a feeling its going to be very difficult to cage this kind of innovation unless there is a recurrent policy in place to periodically ban the import of a wide range of Chinese products.

On the other hand there are lots of super smart Chinese students in top tier colleges who also make salient contribution to research work that benefits us in one way or the other.

The bigger question is how do we resolve both markets to mutually benefit from sunken R&D as opposed to how we starve consumers because of slow paced tinkering refinements when the other party can speed the product to market.

Case in point: Lit Motors

Mr. Xu’s misuse and exploitation of Magic Leap’s image and goodwill is further manifested in Nreal’s shameless use of whales in its demo experiences

Are we patenting Whales in demos now? This is exactly the kind of myopia ML continues to have - thinking they were the first ones to use a whales in a VR/AR demo. I guess Intel was ripping off ML with Leviathan demo in 2014 [1] and theBlu was ripping off ML with their Vive demo in 2015 [2].

[1] https://ronaldazuma.com/Leviathan_at_CES2014.html

[1] https://www.youtube.com/watch?v=MFKbL-GU-_U

Well if people are going to start doing things with animated space whales are they crediting Disney (https://m.youtube.com/watch?v=6eS8WUoKeP0)?

Perhaps the easy availability of royalty free 3d models is relevant (https://www.cgtrader.com/3d-models/animals/fish/humpback-wha...)? Perhaps Oculus Rift museum humpback whale VR back in 2015 was an inspiration?

Seriously? Whales in product demos is "image and goodwill" now?

In any sane, non Sinophobic climate, this would be laughed out of the room

But who knows whether Magic Leap's claimed 'technology' is really there? I mean, they don't have any product yet?

Is idea copying a thing? I don't really know...

This situation strikes me as very similar to what Eric Yuan of Zoom did. He was one of Webex's founding employees and the VP of Engineering for Webex after its acquisition by Cisco. He then left to build a lightweight competitor that's currently cleaning Webex's clock. I wonder if Cisco should sue Eric as well?

Winners: Lawyers

I think everyone ultimately benefits from this. It means cheaper and more accessible AR technology for all.

It's just Bluehole suing Epic Games for PUBG and Fortnite all over again, get on with it.

I don't know the full story here and have not taken the time to dive into it. Perhaps I will later. I just want to make a quick comment based on some of the responses I've seen.

Having been the subject of market research, product plan and intellectual property theft in the past (no, not by the Chinese) and having that information used to launch a competing business I think I have perspective to offer on this.

There is HUGE difference between "R&D" and just "D". "R&D" is slow, costly and full of risk. "D" simply requires execution. Borrowing from sports talk, you know "where the puck is going" and you can aim in that direction. You don't have to invent much and you actually have the luxury of improving upon what you know is and will be the technology of the "R&D" shop from which you stole.

One of the mantras of YC startups goes something like "if you are not embarrassed by your first product...". This is usually true for hardware as well. And, in most instances, you actually know very well what you'd like to build next. However, hardware isn't a simple matter of a weekend pivot. You just don't have that freedom. Not even close. So you have to go with what you have, get it to market, make some money with it and look at introducing your "next generation" product a year later. You can't do hardware spins in a couple of months. The greater the volume the more you are shackled to whatever you are shipping and it can easily be a year or more before you can put out a significantly updated version 2.

I've seen comments about optics being sub-par and more. Well, that's the kind of thing that can happen when you are doing "R&D" and you have to put out a product. It could be embarrassing, but that's what you brought to the party and that's what has to ship.

The thief, on the other hand, knows what you are shipping, what's ugly about it, your future plans, market intelligence and much, much more. Upon gaining this information all they have to do is align it with funding and execute on your version 2 or 3 way before you do. While you are busy building a company the thief can surface out of seemingly nowhere with a product that your first product can't compete with.

This is PRECISELY what happened to me nearly twenty years ago. Our resellers, from the US, Europe, Asia and other areas started to call me out of nowhere to ask if we had licensed our products to company X. One of them made an interesting comment, he said: "Martin, the material they sent me sounds and reads exactly like what we've been talking about for more than a year" (under NDA, of course).

Company X came into the market and put our product --which was going to be replaced in about six months-- to shame. And they did it with MY product plan, MY specification, MY design, MY market intelligence. The net effect was that, ironically, when we came out with our product WE looked like we copied from them. Which was the proverbial addition of "insult to injury".

Anyhow, not defending anyone. I don't know enough. Just wanted to react to some of the comments that point out the thief's product is better than the original. Well, yeah. It would be.

Chinese companies have a very long history of state-supported IP theft.

When a Chinese product so obviously mimics an American product--especially when the chief engineer used to work for the American company--it's on the Chinese company to prove that no IP theft occurred. They've lost the benefit of the doubt.

What do you think about Eric Yuan and Zoom, then? He was the VP of Engineering at Webex before he left, and then he launched Zoom (with a mostly Chinese R&D team). Would you haul him in front of your imaginary court and prosecute him until he proved no IP theft occurred?

Zoom is a US company based out of San Jose...

As Zoom is definitely within the scope of a valid CA non-compete, if it violated any WebEx IP of wouldn't currently be a publicly treated company.

This is entirely ridiculous. IP theft should be proved in a court of law.

define IP, please.

Intellectual Property


There's been a clear pattern spanning over a decade, maybe more, of routine IP theft by Chinese companies. Calling out xenophobia, while ignore these facts, doesn't help anyone.

Lack of respect for IP is also very ingrained in Chinese culture. It's not a new revelation. Whenever the subject comes up with my relatives on the mainland, they reply with, "Is anyone surprised? Why risk wasting time and money, when someone else has already done it for you? Why pay more when you can get it for less?" When I bring up ethical concerns, I get patronizing comments like, "You just don't understand, you are too American now."

If there's any place in the world where actors are rational according to economic theory, it's mainland China.

Xenophobia accusations aside,

especially when the chief engineer used to work for the American company

I think this certainly shifts the burden of proof to Nreal to prove they did not steal Magic Leap's technology after releasing a very similar product

That's certainly not true as a matter of law, and I don't think it's true in terms of any sort of moral or court of public opinion either.

Magic Leap, as with any accuser, faces the burden of proof, full stop. And offhand that looks like a pretty high barrier, given that the Nreal product is so different than Magic Leap's.

Could you please explain how is it Xenophobia to call out someone (or a group) who have been systematically stealing inventions from other nations over the last few decades while profiting from it, sponsored directly by their very own top governmental organizations?

Look what happened to the Japenese bullet train, the Samsung foldable displays, Huawei, etc. etc.

There’s nothing xenophobic about commenting on Chinese IP theft. It’s a very well documented problem.

You also don’t have to be against due process to have disdain for existing IP laws. They make things incredibly expensive for people to use to protect themselves, and have spawned an entire industry around their abuse.

There's nothing wrong with pointing out a pattern

bodi 7 months ago [flagged]

I like patterns too. For example have you ever noticed China artificially props up the US economy via bonds/debt/investment and in return has flagrantly been allowed to steal pretty much every byte of US IP, both from the private sector and defense with zero pushback from our "intelligence" community, legislature, and only a hand wavey stop it from the Obama admin?

You still like patterns?

Would you please not take HN threads further into nationalistic flamewar? That's a violation both of the letter (https://news.ycombinator.com/newsguidelines.html) and spirit of this site.

China has to put that money somewhere. Repatriate it and the yuan inflates destroying it’s pricing advantage. But buy USD and the greenback inflates in value and simultaneously drives monetary expansion with low interest rates. It’s in China’s commercial interest to buy treasuries. For the same reason, dumping the greenback would inflate the yuan-USD pair which would effectively tariff themselves.

> You still like patterns?

I like patterns, do you have some?

> China artificially props up the US economy via bonds/debt/investment

I don't believe you can support that claim. The US economy is far larger than the Chinese economy and far wealthier. The US consumer is far wealthier and far larger than the Chinese consumer. That also includes the US equity markets being far larger and the US bond markets being far larger. Further, US manufacturing is also not dramatically smaller than China's manufacturing sector and their manufacturing has already peaked.

China's holdings of US treasuries and US debt in general is entirely trivial. It's so small now the Fed could wipe it out with a modest round of QE and the dollar would hardly notice (especially since the dollar is very strong right now). It becomes more trivial by the day as China's holdings have been stagnant for many years, the US economy continues to grow larger in real terms, and the US Government's debt continues to expand (reducing China's relative share; their relative share has plunged over the past decade).

Since late 2009 / early 2010, China's US treasury holdings have not net expanded. In inflation adjusted terms, they've contracted considerably (by at least 20-25%). In that time the US economy has added an economy the size of Germany + France (about ~$7 trillion non-adjusted).

China is less critical to the US today, than at any other time in the past decade. That is especially true given their imports of US goods are not very considerable and have not expanded in about eight years (a time during which the US added ~$5.x to $6 trillion to its GDP, even further reducing China's real import contribution value to the US economy).

So its even worse, our leaders gave them the crown jewels and got nothing in return you say?

That hinges on a very outlandish, entirely unsupported conspiracy theory that you floated in your initial post: that the US Government is intentionally allowing China to steal all the IP in question.

The politicians in DC obviously love the idea of debasing their sole superpower status and their global power that goes with it. They like that notion so much, they've never been known to launch wars on the other side of the planet, commit coups, abuse sanctions, abuse their global intelligence / espionage position, or use any other such tactics in the post WW2 era to continue that position of power. So they'll just hand it over to China on a silver platter through vast, intentional IP transfer. More likely, there is a combination of political superpower naivety (persistently overestimating their ability to control China over the past two decades) and incompetence at work.

Dead on!

Hey, did Bloomberg ever retract its entirely unverified Chinese spy chip story?

Just a reminder that they’ve blown all their credibility.

You may not be aware of the great talk titled "Modchips of the State" [1] (presented at 35C3 in Dec 2018).

The speaker managed to reproduce the exact single-chip hardware implant attack suggested in the Oct 2018 Bloomberg Businessweek story [2] [3], which claimed Amazon and Apple found malicious hardware implants in Supermicro motherboards while conducting detailed inspections.

While Bloomberg has never retracted the story, there's an argument that the sources have vested interests in lying to Bloomberg suggesting that attacks developed in lab-conditions actually occurred in the real-world, in order to raise awareness of supply-chain risks (something the current US administration has been attempting to do for some time). There's also a suggestion that the journalist was acting in good-faith but mixed up a few different attacks, with the sources reluctant to clarify things. Another suggestion is that the attack did happen, and Amazon and Apple were forced to issue denials.

It's a very fascinating story. Maybe I'm naive, but if Bloomberg was in-fact wrong, they would issue a correction or a retraction. The fact they haven't retracted it suggests to me that there's truth to the story.

[1] https://www.youtube.com/watch?v=C7H3V7tkxeA

[2] https://www.bloomberg.com/news/features/2018-10-04/the-big-h...

[3] https://www.youtube.com/watch?v=UJGbcjfJ7rU

The fact Supermicro didn’t sue kind of says it all to me.


Be that as it may, this is a report of a filed lawsuit. It's a lot harder to get the fact that a lawsuit was filed wrong, as it's trivial to verify. They even listed the docket number.

There’s “reporting the facts,” and then there’s all the context and background work that constitute the journalism bit. One can do the former and still fail utterly at the latter.

There's really only one sentence that even addresses the context and background with respect to China in this blurb, and that's this one:

"The lawsuit marks the latest accusation from an American firm of intellectual property theft by Chinese companies, a perennial sore point that’s helped escalate tensions between the world’s two largest economies."

Seems pretty fair to me. You'd be hard pressed to say that that's inaccurate or misleading.

And there's more than one journalist and editor at Bloomberg, and people excel at different things. Even WCCFTech gets leaks right once in a while.

Magic Leap has raised $2.6 BILLION dollars in funding and have nothing to show for it. Somehow I don't think a random guy in China is what's holding them back.

As other commenter said, this is not really the point of this particular article.

But I totally agree. I recently had the opportunity to try to develop (with a team) something for the Magic Leap One over a period of about 3 months, and it was an awful experience, a complete and utter disappointment.

Here are just some of the issues we faced:

- terrible overheating: we offloaded most functionality (basically everything in our app but image tracking) to a remote server and both the headset and the lightpack would still overheat to the point of being very hot to the touch within 5-10 minutes

- image tracking in general pretty much doesn't work: the effective range is like 2 feet, and even then it's laggy and inaccurate. And forget about trying to use your own images.

- controller drift: the tracking for the controller literally just starts floating away. We had attached something to the controller and during demos people would say, "woah it's just floating away" and look up as the virtual controller slowly faded into the distance

- unexplainable throttling: once it starts overheating, things like image tracking just stop working, apps freeze or shut down, etc.

- dizziness: everyone who tried it started feeling eye strain within minutes of wearing it

- awful field of view: to put it simply, if you look at someone eye-to-eye, the field of view cannot even show things right above their head

- clunky design: the lightpack is heavy and constantly getting in the way, and the cables attaching it to the headset are very stiff

- Lumin OS: sucks

- controller trackpad: the least functional trackpad I've used in my life. The circular scrolling is incredibly hard to use; our team just dropped the entire scrolling feature for demos because not a single person we trialed with was able to get it to work. Theoretically, it's just a circular motion with your thumb to scroll. In practice, after 3 months of experience using the device I was still unable scroll consistently.

- dim screen: like wearing dark sunglasses

- heavy headset / awkward weight distribution: it feels uncomfortably heavy on your eyes & nose area

And there are many more issues that make it feel more like a prototype made by a couple people in a garage than the flagship consumer product of a company with $2.6b in funding. Really makes me think the whole thing was a big scam, like a slightly less completely-made-up version of Theranos.

That's not what's being alleged though. Seems like a strange take.

Magic Leap promised Fiber Scanning Displays ; They conned everyone into believing they had the tech to beam photons more real than reality's directly in your eyes. Now that they baited and switched, they should just STFU. Who cares if someone copied their disappointing actual stuff?

Whatever they promised - The Google's and VCs of the world put in money into them. What does that tell us about investors in this country?

That FOMO is rampant; if you’re waiting for the startup to prove its tech, you’ve likely missed the investment boat already.

Just saying, there is definitely some rationale to it, esp when considering how investment portfolios are precipitated on a few huge winners and 99% losers.

@dyrosla FOMO: Thank you for the explanation. I am trying to understand. The lottery ticket on the back of engineers and workers. Any thoughts on how long is this game going to last? Now China is playing the same game, but with relaxed rules - to speed things up on FOMO? Do I understand this correct?

I’m not sure if I understand you- FOMO is just the fear of missing out on investing in a company that has a likelihood of making it big.

In the case of Magic Leap, VCs bought into the team’s background and expertise and banked on the likelihood of their success/impact if successful and decided to risk it. It doesn’t mean they were 100% sold- just that the risk/reward calculation they made was favourable.

Had they waited for Magic Leap to be a ways farther in their tech, (and had Magic Leap delivered), the price of entry to invest would be astronomical and the opportunity would have been ‘missed out’ on.


Why was a biomedical engineering guy (with absolutely no background in AR/VR/graphics/CS/...) being given a billion dollar to do something that is not up his ally at all?

What are we missing here? Which Team? I never understood this story.

I’d read more into what was presented that early on and with what team beyond Abovitz.


Could you please stop posting unsubstantive comments to Hacker News?

I'm pretty sure, actually, that this affects _every single company_ that has anything the Chinese government would want. If you want to tell me that there aren't any spies among e.g. 100K Intel/AMD/Qualcomm/Google/Microsoft/Amazon/Apple/Facebook/Tesla/SpaceX/etc employees, I'd say you're very naive. There are also likely domestic spies on staff, as well. You won't even know who they are, and all the right parties know everything they need to know. Basically any company of any consequence which doesn't do DoD-style clearances and compartmentalization for everyone has a bunch of spies on staff, 100% guaranteed.

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