WT Business Beat

By Nick Wakeman

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Nick Wakeman

Bloomberg tells tale of massive hardware hack

A pair of Bloomberg Businessweek reporters have spent months working on a story about a hardware hack that used a tiny chip embedded in servers’ motherboards.

The chip acted as a doorway for hackers to infiltrate any network that include the adulterated servers.

The chips were found on servers built by a California company called Supermicro, a large supplier of motherboards and servers.

The motherboards were manufactured in China, which bears the blame for what the article describes as state-sponsored espionage. The goal apparently was for China to gain long-term access to the networks of major U.S. corporations. The story claims that 30 companies were infiltrated.

Supermicro is seen as another victim and its customers also include the Defense Department and other government agencies.

The story is scary as hell if true and that’s a bit of a rub. Amazon has been pretty adamant that none of its servers had this malicious chip.

In the Bloomberg story, Amazon plays a central role. During a security check of servers used by a company they later acquired – Elemental Technologies – Amazon discovered the chip, according to the Bloomberg story. They then turned that information over to the federal government, which launched an investigation that continues.

But Amazon said it never happened.

Steve Schmidt, Amazon’s chief information security officer, called the story “untrue.”

“As we shared with Bloomberg BusinessWeek multiple times over the last couple months, this is untrue,” Schmidt wrote in a blog post. “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.”

He goes on to pick apart elements of the story.

Bloomberg Businessweek says it has 17 people in government and out as well as former and current Amazon employees who confirmed the story.

You’ll have to decide for yourself who you believe, Amazon or Bloomberg. But I encourage you to read this story even if you believe it’s fiction. Because the supply chain vulnerabilities it describes are very real and very scary.

Posted by Nick Wakeman on Oct 04, 2018 at 9:44 AM

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