Update: Apple and Amazon both issued lengthy statements Thursday concerning the Chinese spy chip allegations. We updated this post to include those statements.
Apple denies that Chinese spy chips infiltrated its iCloud server hardware after claims that motherboards used by Apple, Amazon and dozens of other tech companies contained microchips used for surveillance purposes.
Cupertino insists the story is “wrong and misinformed.” Apple also says Chinese spying had nothing to do with the company’s decision to cut ties with a supplier.
Apple’s statement comes after a Bloomberg Businessweek report, citing 17 sources, claimed China used “a tiny chip to infiltrate America’s top companies.”
The report says thousands of server motherboards manufactured by Super Micro contained malicious chips. About the size of a grain of rice, the Chinese chips could allow spies to “access high-value corporate secrets and sensitive government networks.”
The chip, discovered by an Amazon investigation three years ago, sparked a top-secret probe that continues today.
A suspicious Chinese chip
The story starts in 2015, when Amazon began evaluating a startup called Elemental Technologies. Amazon wanted an acquisition that would help it expand Prime Video, its video streaming service. Several big companies already used Elemental’s technology.
“Its technology had helped stream the Olympic Games online, communicate with the International Space Station, and funnel drone footage to the Central Intelligence Agency,” the report explains.
Part of the evaluation process involved hiring a third-party company to scrutinize Elemental’s security, one source claims. It wasn’t long before that company uncovered “troubling issues.” That discovery prompted Amazon Web Services (AWS) to take a closer look at Elemental’s server products.
Several servers were dispatched to Ontario, Canada. Testers there found a tiny microchip not included in the motherboard’s original design. “Amazon reported the discovery to U.S. authorities, sending a shudder through the intelligence community,” the report continues.
A top-secret probe of Chinese spy chips
The discovery sparked big worries. For one, Amazon, Apple and other tech giants used the servers, made in China by Super Micro. Even worse, the chips found their way into hardware used by a major bank, the Department of Defense, the CIA’s drone operations and the Navy.
And Super Micro didn’t just supply boards to Elemental. It manufactured hardware for hundreds of other customers.
Investigators determined that the chip, inserted at factories run by Chinese subcontractors, allowed attackers to create a doorway into private networks. This method proved significantly more sophisticated than a software-based attack — and potentially much more devastating.
Apple denies its iCloud hardware was affected
Apple, a huge Super Micro customer, had planned to order more than 30,000 of its servers over two years. According to three “senior insiders,” however, Apple also discovered the malicious chip in the summer of 2015. Cupertino cut ties with the company the following year.
Apple disputes these claims.
“Apple is deeply disappointed that in their dealings with us, Bloomberg’s reporters have not been open to the possibility that they or their sources might be wrong or misinformed,” the company said in a statement to AppleInsider on Thursday. “Our best guess is that they are confusing their story with a previously reported 2016 incident in which we discovered an infected driver on a single Super Micro server in one of our labs. That one-time event was determined to be accidental and not a targeted attack against Apple.”
A ‘laughable’ claim
Sources inside Apple, who go unnamed for obvious reasons, told AppleInsider that the allegations of a widespread attack on Apple such as this one are “laughable” and “really, really wrong.”
Bloomberg Businessweek says six current and former national security officials countered the denials of Apple and Amazon. “One of those officials and two people inside AWS provided extensive information on how the attack played out at Elemental and Amazon,” the story says.
In total, 17 people supposedly confirmed the story — including three alleged Apple “insiders.”
The Bloomberg Businessweek report claims that the investigation into the attack continues today.
The October 8, 2018 issue of Bloomberg Businessweek incorrectly reports that Apple found “malicious chips” in servers on its network in 2015. As Apple has repeatedly explained to Bloomberg reporters and editors over the past 12 months, there is no truth to these claims.
Apple provided Bloomberg Businessweek with the following statement before their story was published:
Over the course of the past year, Bloomberg has contacted us multiple times with claims, sometimes vague and sometimes elaborate, of an alleged security incident at Apple. Each time, we have conducted rigorous internal investigations based on their inquiries and each time we have found absolutely no evidence to support any of them. We have repeatedly and consistently offered factual responses, on the record, refuting virtually every aspect of Bloomberg’s story relating to Apple.
On this we can be very clear: Apple has never found malicious chips, “hardware manipulations” or vulnerabilities purposely planted in any server. Apple never had any contact with the FBI or any other agency about such an incident. We are not aware of any investigation by the FBI, nor are our contacts in law enforcement.
In response to Bloomberg’s latest version of the narrative, we present the following facts: Siri and Topsy never shared servers; Siri has never been deployed on servers sold to us by Super Micro; and Topsy data was limited to approximately 2,000 Super Micro servers, not 7,000. None of those servers have ever been found to hold malicious chips.
As a matter of practice, before servers are put into production at Apple they are inspected for security vulnerabilities and we update all firmware and software with the latest protections. We did not uncover any unusual vulnerabilities in the servers we purchased from Super Micro when we updated the firmware and software according to our standard procedures.
We are deeply disappointed that in their dealings with us, Bloomberg’s reporters have not been open to the possibility that they or their sources might be wrong or misinformed. Our best guess is that they are confusing their story with a previously-reported 2016 incident in which we discovered an infected driver on a single Super Micro server in one of our labs. That one-time event was determined to be accidental and not a targeted attack against Apple.
While there has been no claim that customer data was involved, we take these allegations seriously and we want users to know that we do everything possible to safeguard the personal information they entrust to us. We also want them to know that what Bloomberg is reporting about Apple is inaccurate.
Apple has always believed in being transparent about the ways we handle and protect data. If there were ever such an event as Bloomberg News has claimed, we would be forthcoming about it and we would work closely with law enforcement. Apple engineers conduct regular and rigorous security screenings to ensure that our systems are safe.
We know that security is an endless race and that’s why we constantly fortify our systems against increasingly sophisticated hackers and cybercriminals who want to steal our data.
The published Businessweek story also claims that Apple “reported the incident to the FBI but kept details about what it had detected tightly held, even internally.” In November 2017, after we had first been presented with this allegation, we provided the following information to Bloomberg as part of a lengthy and detailed, on-the-record response. It first addresses their reporters’ unsubstantiated claims about a supposed internal investigation:
Despite numerous discussions across multiple teams and organizations, no one at Apple has ever heard of this investigation. Businessweek has refused to provide us with any information to track down the supposed proceedings or findings. Nor have they demonstrated any understanding of the standard procedures which were supposedly circumvented.
No one from Apple ever reached out to the FBI about anything like this, and we have never heard from the FBI about an investigation of this kind — much less tried to restrict it.
In an appearance this morning on Bloomberg Television, reporter Jordan Robertson made further claims about the supposed discovery of malicious chips, saying, “In Apple’s case, our understanding is it was a random spot check of some problematic servers that led to this detection.”
As we have previously informed Bloomberg, this is completely untrue. Apple has never found malicious chips in our servers.
Finally, in response to questions we have received from other news organizations since Businessweek published its story, we are not under any kind of gag order or other confidentiality obligations.
Today, Bloomberg BusinessWeek published a story claiming that AWS was aware of modified hardware or malicious chips in SuperMicro motherboards in Elemental Media’s hardware at the time Amazon acquired Elemental in 2015, and that Amazon was aware of modified hardware or chips in AWS’s China Region.
As we shared with Bloomberg BusinessWeek multiple times over the last couple months, this is untrue. At no time, past or present, have we ever found any issues relating to modified hardware or malicious chips in SuperMicro motherboards in any Elemental or Amazon systems. Nor have we 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. We will name only a few of them here. First, when Amazon was considering acquiring Elemental, we did a lot of due diligence with our own security team, and also commissioned a single external security company to do a security assessment for us as well. That report did not identify any issues with modified chips or hardware. As is typical with most of these audits, it offered some recommended areas to remediate, and we fixed all critical issues before the acquisition closed. This was the sole external security report commissioned. Bloomberg has admittedly never seen our commissioned security report nor any other (and refused to share any details of any purported other report with us).
The article also claims that after learning of hardware modifications and malicious chips in Elemental servers, we conducted a network-wide audit of SuperMicro motherboards and discovered the malicious chips in a Beijing data center. This claim is similarly untrue. The first and most obvious reason is that we never found modified hardware or malicious chips in Elemental servers. Aside from that, we never found modified hardware or malicious chips in servers in any of our data centers. And, this notion that we sold off the hardware and datacenter in China to our partner Sinnet because we wanted to rid ourselves of SuperMicro servers is absurd. Sinnet had been running these data centers since we launched in China, they owned these data centers from the start, and the hardware we “sold” to them was a transfer-of-assets agreement mandated by new China regulations for non-Chinese cloud providers to continue to operate in China.
Amazon employs stringent security standards across our supply chain – investigating all hardware and software prior to going into production and performing regular security audits internally and with our supply chain partners. We further strengthen our security posture by implementing our own hardware designs for critical components such as processors, servers, storage systems, and networking equipment.
Security will always be our top priority. AWS is trusted by many of the world’s most risk-sensitive organizations precisely because we have demonstrated this unwavering commitment to putting their security above all else. We are constantly vigilant about potential threats to our customers, and we take swift and decisive action to address them whenever they are identified.
– Steve Schmidt, Chief Information Security Officer
Note: We originally published this post at 5:52 a.m. Pacific on October 4, 2018. We updated it to include statements from Apple and Amazon.