Chinese spies reportedly used microchips to infiltrate Apple and Amazon

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

The company also noted that it does not design or manufacture networking chips and associated software used in its hardware, saying it procured them from leading networking companies.

Apple, however, says the report is bogus. "No consumer data is known to have been stolen", notes the Bloomberg report.

Bloomberg ran its original story with information from 17 unnamed intelligence and company sources. Supermicro also reportedly had hundreds of customers beyond Elemental, including Apple, a top bank, and government contractors.

News of the years-long infiltration of secure networks through the lowest levels of the global industrial supply chain - China still manufactures the majority of the raw tech behind the world's mobile phones and personal computers - reflects not just a coup for the Chinese intelligence community, but an alarming vulnerability of the USA industrial base.

Tariffs "would cause broad, disproportionate economic harm to USA interests, including our companies and U.S. workers, our customers, United States consumers, and broader U.S. economic and strategic priorities", the letter read.

The report said Amazon discovered the problem when it acquired software firm Elemental and began a security review of equipment made for Elemental by California-based Supermicro.

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The attack was reportedly uncovered following Amazon Web Services' (AWS) $500m September 2015 acquisition video encoding startup Elemental Technologies. A secret investigation apparently remains open three years later.

The data had been siphoned off via tiny chips inserted on server circuit boards made by a company called Super Micro Computer, reported the news agency.

The report comes amid increased concerns that foreign intelligence agencies infiltrating U.S. and other companies via so-called "supply chain attacks", particularly from China where multiple global tech firms outsource their manufacturing. 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. That one-time event was determined to be accidental and not a targeted attack against Apple.

For its part, Supermicro also said it was unaware of any investigation into its products and said it had not been contacted by "any government agency". Apple never had any contact with the Federal Bureau of Investigation or any other agency about such an incident.

The Bloomberg report claims that the rice-sized chips were hidden on server motherboards produced by San Jose-based firm Super Micro. 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.

"It's untrue that AWS knew about a supply chain compromise, an issue with malicious chips, or hardware modifications when acquiring Elemental", Amazon told Bloomberg.

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