Apple, Amazon vehemently deny report of Chinese spy hardware in their servers

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The Apple Inc. store is seen on the day of the new iPhone 7 smartphone launch in Los Angeles, California, U.S., September 16, 2016.

According to the report, the tiny chips were implanted in server motherboards from Supermicro, a publicly traded company in San Jose, California, that a former U.S. intelligence official described to Bloomberg as "the Microsoft of the hardware world".

The bugged servers and other equipment were sold to U.S. banks, hedge funds, and even government agencies by the San Jose-based company Supermicro Computer, according to Bloomberg Businessweek, which cites numerous anonymous intelligence and corporate sources in its shocking story that now threatens to seriously shake up the global technology supply chain and do significant damage to Chinese manufacturers and the country's developing microchip industry. We also published three companies' full statements, as well as a statement from China's Ministry of Foreign Affairs.

In unusually robust on the record statements, the two trillion dollar tech companies said they know nothing about Chinese spies planting rice grain-sized microchips in hardware that reached 30 major American companies. Some said that certain allegations were plausible, but that the strong denials from companies cited in the piece left them with doubts about whether the attacks had happened. But Apple pointed Business Insider to the statement it sent Bloomberg, which said it has "never found malicious chips, "hardware manipulations" or vulnerabilities purposely planted in any server". "This is untrue", Amazon said in a blog post. Elemental's national security contracts weren't the main reason for the proposed acquisition, but they fit nicely with Amazon's government businesses, such as the highly secure cloud that Amazon Web Services (AWS) was building for the Central Intelligence Agency.

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.

Super Micro Computer shares fell 38 percent to $13.26 in Pink Sheet trading.

Workers at this security company realized that this microchip was not part of the original design of the motherboards for these servers, which had been produced in China.

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The microchips were first discovered by Amazon, when the company had a third-party security company analyze the existing servers of Elemental Technologies, a US based startup it was thinking about acquiring.

Both Apple and Amazon discovered the surveillance chips in 2015 and took steps to replace the affected servers, according to the report, which described close cooperation between United States investigators and affected companies. Amazon reported the matter to USA authorities, who determined that the chips allowed attackers to create "a stealth doorway" into networks using those servers, the story said.

SuperMicro latter said it has "never found any malicious chips, nor been informed by any customer that such chips have been found..."

"Bloomberg Businessweek's investigation is the result of more than a year of reporting, during which we conducted more than 100 interviews".

Representatives with the Federal Bureau of Investigation and the U.S. Department of Homeland Security did not respond to requests for comment.

"This report provides more evidence that China's pattern of behavior is a serious threat to national security and supply chain risk management", said said Senator Mark Warner, the top Democrat on the Senate Intelligence Committee.

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