Apple, Amazon, among companies compromised in Chinese intelligence hack: report

Retail giant Amazon and tech giant Apple were among nearly 30 U.S. companies, including a major bank, that was compromised by a Chinese intelligence hardware hacking scheme, according to a Bloomberg report.

The companies and organizations were compromised through a maneuver of installing extra components onto computer chips that the groups had purchased while they were still at the factory being manufactured.

{mosads}The malicious chips were reportedly placed by the Chinese People’s Liberation Army which was able to infiltrate the manufacturing process of a hardware company called Super Micro. At the size of a grain of rice, according to Bloomberg, the chips were designed to be inconspicuous and avoid detection.

Once in place, they could be used to access data on a computer and install malware.

Both Apple and Amazon have denied the report, saying in statements to Bloomberg that their systems were not compromised by hacks.

“We’ve found no evidence to support claims of malicious chips or hardware modifications,” Amazon said in its statement to Bloomberg.

Apple also said they had not “found malicious chips.”

“Apple has never found malicious chips, ‘hardware manipulations’ or vulnerabilities purposely planted in any server,” the company said.

Bloomberg reported that the “companies’ denials are countered by six current and former senior national security officials” who had knowledge of the Obama administration’s discovery of the chips and the subsequent investigation that has continued into the Trump administration.

Spokespeople for the companies and U.S. intelligence have not publicly confirmed Bloomberg’s reporting.

Super Micro manufactured servers for an American firm called Elemental Technologies, whose devices could be “found in Department of Defense data centers, the CIA’s drone operations, and the onboard networks of Navy warships” and companies including Apple and Amazon. 

Elemental was acquired by Amazon in 2015 and specializes in high-quality video compression.

The U.S. has increasingly begun to recognize the cybersecurity risk of leaving its supply chains in China and have included computer and networking hardware, including motherboards, in their latest wave of sanctions against China.

The administration has also signaled that it will move its supply chains to other countries. Lawmakers and U.S. intelligence have more broadly been concerned about the national security threat that Chinese technology poses.

Updated at 11:38 a.m.