Bloomberg's Big Hack Exposé says China had microchips on servers for covert surveillance of Big Tech and Big Brother; Big Tech deny supply chain compromise

According to an in-depth report by Bloomberg yesterday, Chinese spies secretly inserted microchips within servers at Apple, Amazon, the US Department of Defense, the Central Intelligence Agency, the Navy, among others.

What Bloomberg’s Big Hack Exposé revealed?

The tiny chips were made to be undetectable without specialist equipment. These were later implanted on to the motherboards of servers on the production line in China.

These servers were allegedly assembled by Super Micro Computer Inc., a San Jose-based company, one of the world’s biggest suppliers of server motherboards. Supermicro's customers include Elemental Technologies, a streaming services startup which was acquired by Amazon in 2015 and provided the foundation for the expansion of the Amazon Prime Video platform.

According to the report, the Chinese People's Liberation Army (PLA) used illicit chips on hardware during the manufacturing process of server systems in factories.

How did Amazon detect these microchips?

In late 2015, Elemental’s staff boxed up several servers and sent them to Ontario, Canada, for the third-party security company to test. The testers found a tiny microchip, not much bigger than a grain of rice, that wasn’t part of the boards’ original design, nested on the servers’ motherboards.

Following this, Amazon reported the discovery to U.S. authorities which shocked the intelligence community. This is because, Elemental’s servers are ubiquitous and used across US key government agencies such as in Department of Defense data centers, the CIA’s drone operations, and the onboard networks of Navy warships. And Elemental was just one of the hundreds of Supermicro customers.

According to the Bloomberg report, “The chips were reportedly built to be as inconspicuous as possible and to mimic signal conditioning couplers. It was determined during an investigation, which took three years to conclude, that the chip "allowed the attackers to create a stealth doorway into any network that included the altered machines.”

The report claims Amazon became aware of the attack during moves to purchase streaming video compression firm Elemental Technologies in 2015.

Elemental's services appear to have been an ideal target for Chinese state-sponsored attackers to conduct covert surveillance. According to Bloomberg, Apple was one of the victims of the apparent breach. Bloomberg says that Apple found the malicious chips in 2015 subsequently cutting ties with Supermicro in 2016.

Amazon, Apple, and Supermicro deny supply chain compromise

Amazon and Apple have both strongly denied the results of the investigation.

Amazon said, "It's untrue that AWS knew about a supply chain compromise, an issue with malicious chips, or hardware modifications when acquiring Elemental. It's also untrue that AWS knew about servers containing malicious chips or modifications in data centers based in China, or that AWS worked with the FBI to investigate or provide data about malicious hardware."

Apple affirms that internal investigations have been conducted based on Bloomberg queries, and no evidence was found to support the accusations. The only infected driver was discovered in 2016 on a single Supermicro server found in Apple Labs. It was this incident which may have led to the severed business relationship back in 2016, rather than the discovery of malicious chips or a widespread supply chain attack.

Supermicro confirms that they were not aware of any investigation regarding the topic nor were they contacted by any government agency in this regard.

Bloomberg says the denials are in direct contrast to the testimony of six current and former national security officials, as well as confirmation by 17 anonymous sources which said the nature of the Supermicro compromise was accurate.

Bloomberg's investigation has not been confirmed on the record by the FBI.

To know about this news in detail, visit Bloomberg News.

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