China accused of planting spy chips in Pentagon computers

Sean Reid
October 5, 2018

Bloomberg cited 17 unidentified sources from intelligence agencies and business to support claims that Chinese spies had placed computer chips inside equipment used by about 30 companies and multiple USA government agencies, which would give Beijing secret access to internal networks.

One affected company had its servers used by United States government clients, including Department of Defense data centers, Navy warships and the Central Intelligence Agency in its drone operations. Bloomberg News' cybsecurity reporter Jordan Robertson has more.

According to the report, the tiny chips were implanted in server motherboards from Supermicro, a publicly traded company in San Jose, California, that a former USA intelligence official described to Bloomberg as "the Microsoft of the hardware world". "This is untrue", Amazon said in a blog post.

"Bloomberg Businessweek's investigation is the result of more than a year of reporting, during which we conducted more than 100 interviews".

However, all side have come out to vehemently and categorically deny the allegations in theBloombergpiece.

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.

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.

A new report claims that Chinese intelligence added microchips into computers produced in that country.

The company is American, but the motherboards were assembled mainly in China.

According to Bloomberg, Apple first discovered the chips in their servers in May 2015 and quietly reported the issue to the Federal Bureau of Investigation before severing ties with Super Micro the next year.

"There is no truth" to claims in the story that Apple found malicious chips in its servers in 2015, the said in a statement. "Supermicro has never been contacted by any government agencies either domestic or foreign regarding the alleged claims", according to a tweet by Wall Street Journal reporter Robert McMillan.

"As we shared with Bloomberg Businessweek multiple times over the last couple months, 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.‎ Additionally, we have not engaged in an investigation with the government". "We are not aware of any investigation by the FBI, nor are our contacts in law enforcement".

"But I will say the Chinese efforts to threaten us in cyberspace and across the information technology spectrum are a very high priority for us - countering them, establishing structures of deterrence to prevent China from even thinking about doing it, touches on the offensive cyber operations that the president has authorized", Bolton said.

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