China Infiltrated Amazon, Apple, U.S. Companies Using Tiny Chip: Report

China reportedly has resorted to secretly inserting tiny surveillance microchips into servers used by many prominent U.S. companies, including Amazon and Apple. This, as per reports, could lead to increased tensions between the two countries.

It’s a detailed article on Bloomberg Businessweek that has discussed this issue. Bloomberg Businessweek details how the hack happened and how a sweeping, years-long effort was behind the installation of the chips in servers whose motherboards were assembled in China.

The Sydney Morning Herald reports, “China secretly inserted surveillance microchips into servers used by major technology companies, including Apple and Amazon.com, in an audacious military operation likely to further inflame trade tensions between the United States and its leading source of electronics components and products, Bloomberg Businessweek reported.”

The report discusses the Bloomberg Businessweek article in detail, saying, “The article detailed a sweeping, years-long effort to install the surveillance chips in servers whose motherboards – the brains of the powerful computers – were assembled in China. One affected company had its servers used by US government clients, including Department of Defence data centres, Navy warships and the CIA in its drone operations.”

The Bloomberg Businessweek report, however, hasn’t made it clear as to how much of data has been breached using the surveillance chips. No customer information reportedly has been stolen. Citing 17 unnamed sources (who were reportedly “granted anonymity because of the sensitive, and in some cases classified, nature of the information”), the report states that the massive hack by the Chinese spies has impacted almost 30 U.S. companies by compromising America’s technology supply chain.

The report, which claims to be based on “extensive interviews with government and corporate sources”, also mentions the initiation of a top-secret U.S investigation on the matter. The Sydney Morning Herald report states, “The extent of the data China collected from the surveillance chips was not clear from the report, and no consumer information was known to have been stolen. But the report said a top-secret US government investigation, dating from 2015 and involving the FBI, remains open.”

Reports say that Apple, Amazon and other companies have disputed the Bloomberg Businessweek report. The Chinese government has also disputed it while the FBI and US intelligence officials reportedly chose not to comment on the issue.

The Washington Post reports, “The Chinese government, Apple, Amazon and other involved companies disputed the report to Bloomberg Businessweek, and the FBI and U.S. intelligence officials declined to comment…Several U.S. officials contacted by The Washington Post said they were uncertain about the accuracy of the Bloomberg Businessweek report. One U.S. official who said Thursday morning that the thrust of the article was true later expressed uncertainty about that conclusion. This person spoke on the condition of anonymity to discuss matters not approved for public release…Amazon called the story “untrue” in a statement. Apple said in a statement that “we have found absolutely no evidence to support any of” the allegations by Bloomberg Businessweek.”

As per reports, the surveillance chips could have connected to outside computers for secretly downloaded software and bypassing security protections elsewhere.
The Washington Post report, based on the Bloomberg Businessweek article, explains, “The surveillance microchips reportedly could have connected to outside computers and secretly downloaded software to bypass security protections, such as passwords or encryption keys, stored elsewhere on the affected servers, enabling remote computerized spying… The operation, which Bloomberg Businessweek attributed to a Chinese military unit that specializes in hacking hardware, worked by inserting a tiny, innocuous-looking microchip onto motherboards in servers produced by Supermicro, a leading supplier of such equipment, based in San Jose. The company is American, but the motherboards were assembled mainly in China.”

As per the Bloomberg Businessweek report, dozens of U.S. companies may have used affected servers before the hack was discovered. The report also says that Apple and Amazon, after detecting the issue in 2015, had taken steps to replace sabotaged servers. This, and the alleged cooperation between US investigators and affected companies, have been disputed by the companies, including Apple and Amazon.

These revelations could definitely impact the already uneasy relationship between the two economies, say experts. The Washington Post reports, “The United States and China are locked in a bitter and escalating trade war, in which hundreds of billions of U.S. and Chinese products are under tariff…The reported manipulation of electronics supply chains to U.S. companies are certain to sharpen long-standing questions about the crucial but uneasy relationship between the world’s two leading economies. American companies design and sell leading technology products, such as servers, laptop computers and smartphones, but they are built and assembled largely in China.”