Apple denies claim China slipped spy chips into its iCloud server hardware [u]

A Bloomberg report claims Apple, Amazon, and almost 30 other companies were the subject of hacking by Chinese spies embedding chips in hardware for surveillance purposes, a story that Apple has now twice refuted as "wrong and misinformed."

Reportedly, servers examined by Amazon had extra hardware embedded on the motherboard, found during a 2015 inspection of startup Elemental Technologies that Amazon was keen to acquire. Bloomberg writes the motherboards had an extra microchip about the same size as a grain of rice, that wasn't part of the original design.

Elemental's motherboards are produced by Supermicro. Apple was once poised to order more than 30,000 servers for its iCloud data centers from Supermicro over two years.

The chips allegedly allowed attackers to access a "stealth doorway onto any network" where the computers were located. The attack with the single chip allegedly offered the potential for "long-term stealth access" that is usually expected of spy agencies. The attack is an extremely difficult as compared to software-based hacks, but could offer far greater results, if successful.

Aside from corporate espionage, the attack could also affect the U.S. military and law enforcement. Elemental's servers were used by the Department of Defense, the CIA's drone operations, on Navy warships, among other sensitive locations.

Bloomberg claims senior insiders at Apple advised that it had found a number of malicious chips in Supermicro boards in May 2015, after detecting odd network activity and firmware problems. The company reportedly informed the FBI, but kept the details of what it had uncovered quiet, even internally.

A few weeks after the discovery, Apple started to remove all Supermicro servers from its data centers, with 7,000 installed units replaced over a brief period. According to the report, Apple denies any servers were removed. Apple allegedly cut ties to the company in 2016, for "unrelated reasons" according to the report.

However, Apple differs with the account as set forth by the publication.

Industry response

Apple has provided the following statement to AppleInsider and several other venues.

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 has 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

Sources inside Apple not authorized to speak on behalf of the company that AppleInsider contacted on Thursday morning called the allegations of a wide-spread attack on Apple by this vector as "laughable" and "really, really wrong." However, they did note that the company is constantly being probed for weaknesses by every imaginable online avenue every hour of every day.

Late on Thursday, Apple amplified its statement on the matter.

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.

Amazon had a similar response. It said:

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.

What happened with Apple in 2015?

Supermicro Senior Vice President of Technology Tau Leng claimed in 2017 that Apple not only discontinued future business as a result of a single compromised internal development environment following a firmware update in the middle of 2016, but also returned equipment it had ordered.

At the time, Leng claimed that after he was informed of the compromised firmware, Supermicro asked for the version number that was installed. According to the executive, Apple provided an invalid number and refused to disclose any additional information to Super Micro. Leng also claimed that the bad firmware was for a networking chip used in the servers, and "thousands of customers" utilize the same equipment.

The firmware update that caused the compromise was performed in Apple's testing and design lab, and not on any forward-facing hardware. Sources claimed that the firmware downloaded was downloaded from Supermicro's support site, and it was still hosted there months after the event.

At the time, Apple was investing heavily into adding capacity to its Prineville, Ore. and Maiden, N.C. data centers. It had just concluded a massive expansion of the Reno iCloud facility as well.

Supermicro reported that it had lost business from two long-term significant data center equipment customers in the tail-end of 2016, causing a drop in sales and profits year-over-year.