China Infiltrated Apple, Amazon and Other US Companies Using Spy Chips on Servers, According To Bloomberg; Apple, and Amazon, Among Others Refute the Report

Data center equipment run by Amazon Web Services and Apple were subject to surveillance from the Chinese government via a tiny microchip inserted during the equipment manufacturing process, Bloomberg BusinessWeek reported Thursday, citing 17 people at Apple, Amazon, and U.S. government security officials, among others. The compromised chips in question came from a server company called Supermicro that assembled machines used in the centers, the report added. The scrutiny of these chips, which were used for gathering intellectual property and trade secrets from American companies, have also been the subject of an ongoing top secret U.S. government investigation, which started in 2015, the news outlet reported. Amazon, which runs AWS, Apple, and Supermicro have disputed summaries of Bloomberg BusinessWeek‘s reporting.

The report states that Amazon became aware of a Supermicro’s tiny microchip nested on the server motherboards of Elemental Technologies, a Portland, Oregon based company, as part of a due diligence ahead of acquiring the company in 2015. Amazon acquired Elemental as it prepared to use its technologies for what is now known as Prime Video, its video streaming service. The report adds that Amazon informed the FBI of its findings. From the report: One official says investigators found that it eventually affected almost 30 companies, including a major bank, government contractors, and the world’s most valuable company, Apple. Apple was an important Supermicro customer and had planned to order more than 30,000 of its servers in two years for a new global network of data centers. Three senior insiders at Apple say that in the summer of 2015, it, too, found malicious chips on Supermicro motherboards. Apple severed ties with Supermicro the following year, for what it described as unrelated reasons. […] [Update: Some counterpoint: According to an earlier report by The Information, security concerns were indeed a reason why Apple and Supermicro parted ways.] A U.S. official says the government’s probe is still examining whether spies were planted inside Supermicro or other American companies to aid the attack. Some background on Supermicro, courtesy of Bloomberg: Today, Supermicro sells more server motherboards than almost anyone else. It also dominates the $1 billion market for boards used in special-purpose computers, from MRI machines to weapons systems. Its motherboards can be found in made-to-order server setups at banks, hedge funds, cloud computing providers, and web-hosting services, among other places. Supermicro has assembly facilities in California, the Netherlands, and Taiwan, but its motherboards — its core product — are nearly all manufactured by contractors in China. The company’s pitch to customers hinges on unmatched customization, made possible by hundreds of full-time engineers and a catalog encompassing more than 600 designs. Further reading: Amazon Offloaded Its Chinese Server Business Because it Was Compromised, Report Says.