China inserted chips in Amazon and Apple hardware to spy

Nichole VegaOct 05, 2018

Bloomberg Businessweek cited 17 unnamed intelligence and company sources as saying that Chinese spies had placed computer chips inside equipment used by around 30 companies, as well as multiple USA government agencies, which would give Beijing secret access to internal networks. These motherboards have been used in servers by companies like Amazon and Apple as well by at least 28 other U.S. companies and organisations.

The company instead suggested that Bloomberg's sources may have been mistaking an incident in 2016 when an accidental vulnerability was found on a single Super Micro server inside the company.

Amazon and Apple both strongly rejected the findings, which Bloomberg said were based on conversations with 17 anonymous sources, including insiders at both tech giants.

Both Apple and Amazon discovered the surveillance chips in 2015 and took steps to replace the affected servers, according to the report, which described close cooperation between USA investigators and affected companies.

Apple said it had refuted "virtually every aspect" of the story in on-record responses to Bloomberg.

The chips were reportedly created to steal IP and trade secrets from American companies.

Bloomberg claims the probe led to some companies removing servers made by Super Micro and ending business relationships with the company.

Update 15.02 BST: At the time of writing, five hours after Bloomberg's investigation was released, Supermicro's share price is down 30.42 percent to $14.89.

On this we can be very clear: Apple has never found malicious chips, "hardware manipulations" or vulnerabilities purposely planted in any server. This level of hardware hacking would be borderline unprecedented in scope, and Bloomberg claims the FBI opened an investigation (after the incident was reported by Apple) that's still in progress three years later.

"Amazon reported the discovery to USA authorities, sending a shudder through the intelligence community". Its technology had helped stream the Olympic Games online, communicate with the International Space Station, and funnel drone footage to the Central Intelligence Agency. The lengthy statement can be found here (published separately from the original report), along with statements from Amazon, Super Micro and China's Ministry of Foreign Affairs, which are also named in the story. Supermicro itself is not implicated and disputes the Bloomberg report. One affected company had its servers used by US government clients, including Department of Defense data centers, Navy warships and the Central Intelligence Agency in its drone operations.

Amazon responded that "at no time, past or present, have we ever found any issues relating to modified hardware or malicious chips in Super Micro motherboards in any Elemental or Amazon systems". "We are not aware of any investigation by the FBI, nor are our contacts in law enforcement".

Back in 2015, Amazon took such a liking to Elemental for its software-defined video solutions, that Amazon Web Services (AWS) announced on September 3, 2015, its intention to acquire Elemental.

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