Technology

Apple categorically denies bombshell report on Chinese 'spy' microchips in iCloud servers

Apple categorically denies bombshell report on Chinese 'spy' microchips in iCloud servers

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. Apple, which has since severed ties with Supermicro for what it says are unrelated reasons, says it has never found "malicious chips" in its products. Elemental's servers could be found in Department of Defense data centers, the CIA's drone operations, and the onboard networks of Navy warships. However, the report is supported by six anonymous current and former senior national security officials.

Amazon, Apple and Super Micro have all denied Bloomberg's report. The surveillance microchips reportedly could have connected to outside computers and secretly downloaded software to bypass security protections elsewhere, such as passwords or encryption keys, stored elsewhere on the affected servers, enabling remote computerized spying.

Apple added that it had repeatedly provided on the record facts to refute "virtually every aspect of Bloomberg's story relating to Apple". Elemental's video-compressing servers were assembled by Californian company Supermicro, which in turn built its motherboards in China. Upon the discovery, Amazon reportedly alerted US authorities, which sent "a shudder through the intelligence community", Bloomberg wrote. That one-time event was determined to be accidental and not a targeted attack against Apple. Bloomberg claims Amazon discovered them ahead of its 2015 acquisition of Elemental Systems and reported the chips to the Federal Bureau of Investigation before removing them all within a one-month period. At the time, Elemental had contracts with government customers like the Central Intelligence Agency, and according to the report AWS reported the discovery to federal authorities.

Bloomberg Businessweek, which published an exclusive report Thursday based on a lengthy investigation, said that Chinese hacking was "the most significant known supply chain attack ever against United States companies".

Many US companies, including Apple, Amazon and major banks, were also using Super Micro Computer hardware.

The hardware implants were apparently first discovered by security testers doing due diligence on the systems of a video-compression firm called Elemental, ahead of its takeover by Amazon. China's reported goal was to access these data centers and swipe confidential information. The outlet said the hacking is "the most significant known supply chain attack ever against USA companies". Apple never had any contact with the Federal Bureau of Investigation or any other agency about such an incident.

Meanwhile, Beijing didn't directly address questions about manipulation of Supermicro servers, issuing a statement that read, in part: "Supply chain safety in cyberspace is an issue of common concern, and China is also a victim".


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