China inserted chips in Amazon and Apple hardware to spy

Friday, 05 Oct, 2018

The report cited 17 intelligence and corporate sources, who claimed that Chinese spies had also inserted chips inside equipment used by multiple U.S. government agencies, which could potentially give Beijing access to internal servers. So for the sake of national and consumer security, let's hope that Bloomberg is somehow mistaken.

Neither AWS, Super Micro nor the Chinese foreign ministry immediately responded to requests for further comment. Beijing has previously denied allegations of orchestrating cyberattacks against Western companies.

Amazon reportedly discovered the issue in 2015 after buying video service firm Elemental. Apple said it did not find the chips as asserted by BusinessWeek - which cited anonymous government and corporate sources.

Amazon, however, also disputes the story.

The operation saw a branch of China's armed forces, known as the People's Liberation Army, forcing Chinese manufacturers to insert chips the size of a grain of rice into US-designed servers during the equipment manufacturing process, the report claims. Nor have we engaged in an investigation with the government.

The servers had been compromised during manufacturing and the chips activated once they were up and running, it said. They had fallen as low as $8.50 earlier in the session.

"All companies involved in the story, including Supermicro, strongly deny the Bloomberg report". "Apple never had any contact with the Federal Bureau of Investigation or any other agency about such an incident", the company said in a statement provided to Bloomberg. The report claims Amazon became aware of the attack during moves to purchase streaming video compression firm Elemental Technologies in 2015.

The investigation found that Elemental servers, which were assembled by Super Micro, were tainted with tiny microchips that were not part of their design, Bloomberg said.

Amazon said in a statement that the report is "untrue". "We are deeply disappointed", Apple said, that Bloomberg did not consider that its sources "might be wrong or misinformed".

Apple pointed Business Insider to the statement it sent Bloomberg, which said: "Apple has never found malicious chips, "hardware manipulations" or vulnerabilities purposely planted in any server". Bloomberg quoted "three senior insiders" as saying they had also discovered the tiny chips, which Bloomberg said were much smaller than a penny and were created to transmit information back to China about the data flowing across the servers.

"As we shared with Bloomberg BusinessWeek multiple times over the last couple months, this is untrue", Amazon said in a statement, which you can read here.

"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 report explains.

There have been increased concerns about foreign intelligence agencies infiltrating U.S. and other companies via so-called "supply chain attacks", particularly from China where multiple global tech firms outsource their manufacturing.