China accused of planting spy chips in Pentagon computers

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Tiny chips inserted in U.S. computer equipment manufactured in China were used as part of a vast effort by Beijing to steal USA technology secrets, a published report said Thursday.

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.

According to the Bloomberg report, the microchips, which were the size of a grain of rice, provided China with a way to remotely access the computers.

It was not immediately clear what was the cause, but the declines follow a Bloomberg Businessweek report that US tech companies' systems had been infiltrated by malicious chips inserted by Chinese intelligence agents. "This is untrue", Amazon said in a blog post.

All companies involved in the story, including Supermicro, have strongly disputed Bloomberg's findings. "We stand by our story and are confident in our reporting and sources". China manufactures as much as 75 per cent of the world's smartphones and perhaps as much as 90 per cent of the world's personal computers, according to the report.

"The report that China sought to infiltrate the computer chip supply chain, if true, is deeply disturbing and the latest example of the lengths that Beijing will go to in order to steal America's official and commercial secrets", Representative Adam Schiff of California, the top Democrat on the House Intelligence Committee, said in a statement.

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. China has responded with counter-tariffs on American products with particular political resonance, including agricultural goods.

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The Chinese foreign ministry also denied the allegations and said the country is a "resolute defender of cybersecurity". Apple removed all Super Micro servers from its data centers in 2016. Bloomberg also reported that the modified hardware was found in systems operated by Elemental Media, a company Amazon acquired in 2015, which the company also refutes.

On this we can be very clear: Apple has never found malicious chips, "hardware manipulations" or vulnerabilities purposely planted in any server.

Amazon's response was shorter but carried the same message: "We've found no evidence to support claims of malicious chips or hardware modifications", it said.

Amazon Web Services then sent Gizmodo an even stronger denial, insisting, "we have not engaged in an investigation with the government".

"There are so many inaccuracies in this article as it relates to Amazon that they're hard to count".

For its part, Supermicro said that it is not aware of ever losing a customer to this type of issue, adding that it does not know of any investigation and has not been contacted by any government agency regarding this kind of matter.

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