Tech giants’ denials of rogue chips further blur picture of US-China relations

The overall picture of US-China trade relations has been further confused by conflicting claims about malicious hardware on servers.
8 October 2018 | 9 Shares

Tech giants’ denials of rogue chips further blur picture of US-China relations. Source: Shutterstock

The usually taciturn Apple and Amazon have both strongly refuted claims made in a Bloomberg report that Chinese espionage efforts were able to infiltrate the companies by placing small so-called spy chips on servers built for both companies.

Amazon Web Services has disputed it was aware of any such chips or malicious hardware modifications. Apple has released a similarly strongly worded statement which it supplied to Bloomberg stating that the company had “never found malicious chips, “hardware manipulations” or vulnerabilities purposely planted in any server.”

The claims of Chinese involvement in spying activities can be traced back to Supermicro, a San Francisco-based server manufacturer, which supplied hardware to both companies via an interim company called Elemental Technologies. Elemental went on to be acquired by Amazon in 2015.

At the time, Elemental Technologies was known to have held government contracts with the CIA, amongst other authorities.

Steve Schmidt, chief information security officer for Amazon Web Services stated in a blogpost: “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.”

The Bloomberg report claimed that AWS reported its discoveries to federal authorities, a claim refuted by the company. In a statement to Bloomberg, Apple also said “[we] never had any contact with the FBI or any other agency about such an incident.”

Supermicro has said its products were not being and had never been investigated by law-enforcement authorities, nor had it been contacted by “any government agency” concerning espionage activities.

The computer hardware industry relies heavily on Chinese manufacturers for key components, including integrated circuit boards. Bloomberg claimed that the rogue microchips said to be “smaller than a penny” were able to transmit data from a server to China.

US Vice President Mike Pence addresses the Hudson Institute on the administration’s policy towards China in Washington, DC, on October 4, 2018. Source: AFP PHOTO / Jim WATSON

On Thursday last week, US Vice President Mike Pence accused Google of being a company that was involved in “abetting Beijing’s oppression”.

Allegedly, Google is running a covert project, Dragonfly, said to be a search engine that blocks several Western sites such as Facebook, Twitter, the NYT, and the BBC, and also will not return search results which may contradict the ruling government’s approved line.

Pence speaking at a conservative think tank in Washington DC said:

“Google should immediately end development of the Dragonfly app that will strengthen Communist Party censorship and compromise the privacy of Chinese customers […]

More scholars are speaking out forcefully and defending academic freedom, and more universities and think tanks are mustering the courage to turn away Beijing’s easy money, recognizing that every dollar comes with a corresponding demand. We’re confident that more will join their ranks.”

It is often difficult to discern the minutiae of the Trump administration’s foreign policy as read from the scattergun Tweets of its leader, but Pence’s hardline rhetoric on China is probably politically expedient. The vice president also refreshed claims that China is interfering in US mid-term elections, made by Trump last week, that “China has been attempting to interfere in our upcoming 2018 election, coming up in November, against my administration.”

The path of the US government’s foreign policy direction was further confused by the Department of Homeland Security’s Kirstjen Nielsen’s refusal to endorse the president’s claims, stating that China pursues a “holistic approach” in its pursuit of a positive image of itself in the US.