Beijing seems to have figured out a relatively simple way to spy on government contractors and some of the biggest businesses in the US: Implant tiny microchips in the tons of electronic equipment being assembled in China and destined for America. A story by Bloomberg Businessweek reports that the US is in the midst of a secret three-year investigation of the scheme, which it says was uncovered by none other than Amazon. Investigators say that a unit of China's People's Liberation Army planted chips the size of a pencil point onto computer motherboards being built for a US company called Supermicro. One source explains that the company is the "Microsoft of the hardware world"—its motherboards are used in servers around the world. Supermicro itself is not implicated and disputes the Bloomberg report.
"One official says investigators found that it eventually affected almost 30 companies, including a major bank, government contractors, and the world's most valuable company, Apple," write Jordan Robertson and Michael Riley. Apple, which has since severed ties with Supermicro for what it says are unrelated reasons, says it has never found "malicious chips" in its products. The story says Amazon found the chips while investigating a potential partnership with a startup and alerted the government, though Amazon also disputes the account. Bloomberg, however, says it talked to 17 people who've confirmed the investigation into compromised Supermicro products. It's not clear what, if anything, China has gleaned from the operation, though the story says no consumer information is believed to have been stolen. Read the full report here. (More Longform stories.)
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