An AI company may cross a number of criminal thresholds in the course of innovation. On 7 September 2026 the Supreme People’s Court issued its Opinion on the Trial of Cases Involving Artificial Intelligence Disputes, which clarifies criminal liability for the use of AI to commit fraud, insult, defamation, infringement of personal information and unlawful acquisition of data.
Criminal offences to which an AI company may be exposed
Offence one: illegal business operation (Article 225 of the Criminal Law)
Typical scenario: an AI relay station establishes a cross-border data forwarding channel without a licence, without an ICP licence, without a data export security assessment and without filing, and calls an offshore model to serve the public for a fee.
Thresholds:
| Subject | Turnover from the illegal business | Illegal gains |
|---|---|---|
| Individual | RMB 50,000 or more | RMB 10,000 or more |
| Entity | RMB 150,000 or more | RMB 50,000 or more |
The first Shanghai AI relay station case of 2026: the operator had no ICP licence, had not carried out a data export security assessment and had not filed before calling offshore models, and faced criminal exposure.
Offence two: unlawful acquisition of computer information system data (Article 285(2) of the Criminal Law)
Typical scenario: an AI crawler circumvents the robots protocol or bypasses security measures to obtain data.
Thresholds (where circumstances are serious):
| Circumstance | Quantitative threshold |
|---|---|
| Acquisition of authentication information for payment and settlement | Ten or more sets |
| Acquisition of other authentication information | 500 or more sets |
| Unlawful control of computer information systems | 20 or more devices |
| Illegal gains | RMB 5,000 or more |
| Economic loss caused | RMB 10,000 or more |
Offence three: infringement of citizens’ personal information (Article 253A of the Criminal Law)
Sentencing:
| Circumstance | Term | Fine |
|---|---|---|
| Serious circumstances | Fixed-term imprisonment of not more than three years or criminal detention | Fine, in addition or alone |
| Especially serious circumstances | Fixed-term imprisonment of three to seven years | Fine |
Offence four: refusal to perform the obligation of information network security management (Article 286A of the Criminal Law)
Failure by a platform to manage API security may fall within the scope of this offence.
The compliance-based non-prosecution regime
Overview
The corporate compliance reform is a reform conducted by the procuratorial organs on the basis of statutory case handling, resting principally on discretionary non-prosecution and procuratorial recommendations. The Supreme People’s Procuratorate has published three batches of typical cases.
Applicability
| Condition | Description |
|---|---|
| Type of offence | Economic and business offences |
| Typical offences | Fraudulent issue of VAT invoices, bid rigging, illegal business operation, infringement of intellectual property |
| Subject | An enterprise, or its actual controller or core management, suspected of an offence committed in the performance of duties |
Procedure
- The enterprise applies for compliance rectification.
- The procuratorate commissions third-party supervision and evaluation.
- The enterprise carries out rectification, usually over six months to two years.
- The third-party organisation issues an evaluation conclusion.
- The procuratorate decides not to prosecute.
Practical points
- Non-prosecution is not a guarantee of immunity; active rectification is required.
- The application must be made before the case enters the trial stage.
- The Supreme People’s Procuratorate encourages exploration outside the pilot regions within the limits of the law.
- In a 2025 Xinyang, Henan case, the enterprise’s business recovered after rectification and the procuratorate decided not to prosecute.
Responding to a regulatory investigation
Rules governing administrative inspection
| Requirement | Basis |
|---|---|
| A plan to be prepared before inspection and approved by the person in charge | Opinions of the General Office of the State Council on Strictly Regulating Administrative Inspections of Enterprises |
| An administrative inspection notice to be issued | As above |
| Enforcement officers to produce their credentials | As above |
| Verification of leads within 15 working days | Administrative Penalty Procedure Rules of the State Administration for Market Regulation |
| Extension by a further 15 working days in special circumstances | As above |
Strategy
| Stage | Action |
|---|---|
| Before inspection | Maintain a day-to-day compliance system and retain business records |
| During inspection | Cooperate, state the facts accurately and provide the materials requested |
| Representations | A right to make representations on a proposed penalty |
| Hearing | A hearing may be requested where the conditions are met |
| Review and litigation | Administrative review or litigation may be brought against a penalty decision |
Key principles
- Do not destroy evidence — destruction or concealment of evidence may constitute obstruction of official duties.
- Do not make false statements — false materials may aggravate the penalty.
- Instruct counsel — for sensitive matters such as data and cross-border operations, counsel should be involved throughout.
- Keep records — retain all records and materials relating to cooperation with the investigation.
Criminal compliance checklist for an AI company
| Item | Risk point |
|---|---|
| ICP licence | Required for the provision of internet information services to the public |
| Data export security assessment | Required for transfers of data outside China |
| Algorithm filing | Required for algorithmic services with public-opinion attributes |
| Crawler compliance | Observe robots.txt and do not defeat security measures |
| Personal information processing | Obtain consent and do not use data beyond the agreed scope |
| API calls | Calling offshore APIs requires filing and assessment |
| Content safety | Do not generate or disseminate unlawful content |
| User verification | Real-identity verification of users |
Judicial developments in 2026
On 7 September 2026 the Supreme People’s Court issued its Opinion on the Trial of Cases Involving Artificial Intelligence Disputes, which provides that:
- The use of AI to commit fraud, insult or defamation gives rise to civil or criminal liability in accordance with law.
- The use of AI to harm business reputation or product reputation gives rise to civil compensation or criminal prosecution.
- The use of AI to infringe citizens’ personal information gives rise to criminal prosecution.
- The use of AI to unlawfully obtain computer information system data gives rise to criminal prosecution.
- The use of AI to produce, sell or disseminate obscene material gives rise to criminal prosecution.
Frequently asked questions
Q: We call an offshore API to build an AI product. Is there criminal risk? A: There may be. Where an offshore model is called to serve the public for a fee without an ICP licence, without a data export security assessment and without filing, an offence of illegal business operation may be alleged. In a Chongqing case the enterprise was fined RMB 30,000 to 50,000; the first Shanghai AI relay station case of 2026 may give rise to criminal prosecution.
Q: We have been summoned by the Cyberspace Administration. What should we do? A: (1) Cooperate with the investigation and state the facts accurately; (2) destroy no records; (3) instruct counsel immediately; (4) exercise the right to make representations and to request a hearing on any proposed penalty.
Q: What conditions apply to compliance-based non-prosecution? A: It applies principally to economic and business offences, such as illegal business operation, fraudulent invoicing and bid rigging, and requires active rectification and third-party evaluation. A compliance system should be built in advance rather than assembled after the event.
Q: Our AI crawler has been prosecuted for unlawful data acquisition. What defence is available? A: The key question is whether security measures were “bypassed”. Where the robots protocol was observed, no technical protection was circumvented and only publicly available information was obtained, it may be argued that the acquisition was not unlawful. Where anti-crawling measures were defeated or non-public information obtained, the criminal risk is substantially higher.
This article is prepared on the basis of the Criminal Law, the Cybersecurity Law, the Personal Information Protection Law and the 2026 Supreme People’s Court opinion on AI disputes. For assistance with criminal compliance for an AI company or with the handling of a regulatory investigation, please contact Geason Law Offices.