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Editorial

It is past time for Bloomberg to retract or unequivocally prove the iCloud spy chip story

Bloomberg had a stunningly important —and apparently stunningly wrong —news story about an alleged iCloud spy chip and now it's hoping we'll forget about it. Two months on, the company has a responsibility to either prove or retract it, and it's a responsibility the publication is avoiding.

Bloomberg Businessweek's image of the alleged spy chip

Bloomberg Businessweek's image of the alleged spy chip


Apple, Amazon, the government, national security advisors, and independent technology experts alike have all said Bloomberg Businessweek is wrong about Chinese-made spy chips in iCloud servers. They haven't just said it, they've issued extensively detailed and documented evidence to say this didn't happen and could not happen. Even so, we were willing to give Bloomberg time to prove its story —but that's over.

The reason we would be willing to believe them is that we do remember Watergate, we do know the saying that there's no smoke without fire. Plus we're pragmatic —we know that such a security breach is so incalculably damaging to America that these firms would of course all deny it.

Of course we also know that Bloomberg has a record for publishing incorrect stories about Apple. Those stories included predictions of poor sales of iPads, iPhones, Apple TV and HomePods based on incomplete reporting or ignoring facts that contradicted the idea.

While most of the inaccurate reporting has been financial, it has also questioned business strategy. So the scope of its questionable reporting about Apple is quite broad, yet this spy chip allegation is on another scale altogether.

It's hard to fully comprehend the implications of this allegation. Thirty companies including Apple and Amazon were alleged to have had their hardware infiltrated. They were servers that reportedly used motherboards built by Super Micro and which, according to Bloomberg, had an extra chip, "not much bigger than a grain of rice, that wasn't part of the boards' original design."

This is supposedly a spy chip which gets access to sensitive code which it then either manipulates or transmits. And, that alleged chip one that Bloomberg claims is embedded secretly in machines in data centers owned by Apple and others. The company has yet to present one, and the picture it uses to illustrate the size of the alleged chip appears to be a mundane directional gate.

A section from one of Apple's datacenters

A section from one of Apple's datacenters


To be clear, Apple, Amazon and all other firms even tangentially mentioned in the piece have refuted the allegations and done so vehemently. Unusually vehemently in the case of Apple, which more often refuses to comment on stories.

Bloomberg Businessweek has responded to the tsunami of criticism by saying that it stands by the story. It hasn't published that on its own site, only a spokesperson has said it to Buzzfeed.

Apart from that comment, all Bloomberg has done publicly since then is follow up the October 4 story with one a few days later claiming further evidence. Otherwise, the publication that brought us this gigantic story has irresponsibly gone silent on it.

This week, though, the Washington Post reported that Bloomberg journalists were digging into the story further. "In emails to employees at Apple," says the Post, "Bloomberg's Ben Elgin has requested 'discreet' input on the alleged hack."

The Post is owned by Amazon's Jeff Bezos and this reporting is in an Opinion blog by writer Erik Wemple rather than on the news pages. Nonetheless, Wemple claims to have been told that Elgin has said that if hears enough sources refuting Bloomberg's claim, he will "send that message up his chain of command." What that command does, is apparently not up to him.

We can give them one source that's under his nose and that's Bloomberg itself. At the very end of its original October 4 piece, Bloomberg Businessweek wrote that "Bloomberg LP has been a Supermicro customer. According to a Bloomberg LP spokesperson, the company has found no evidence to suggest that it has been affected by the hardware issues raised in the article."

The whole story is based on the word of 17 unnamed people but you'd have thought Bloomberg's own spokesperson could go public. So Bloomberg is being silent while continuing to investigate privately. There's nothing wrong with that —except that this research should've been done before the first story was published.

Two months on from its earthshaking claim, Bloomberg is staying quiet and hoping we'll forget about it, and the story will get rolled under the waves that is the 2018 news cycle and forgotten about. That doesn't sound like a news organization with a fantastic story. It's making Bloomberg sound more like a news organization that wanted attention.

Tim Cook

Tim Cook


There is no smoke without fire but right now it doesn't look like there's any smoke. Bloomberg needs to prove it or do what Tim Cook insists and retract it.

Doing neither is damaging. It's obviously damaging for the firms mentioned in the report but it also further dents Bloomberg itself. If it will publish gigantic stories that it can't back up, you cannot trust it on even the smaller stuff.

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