US Govt Backs Apple, Amazon Denials of Spy Chip Report

The U.S. Department of Homeland Security (DHS) said it has “no reason to doubt” Apple Inc. (AAPL) and Amazon.com Inc.’s (AMZN) denials that their servers were compromised by Chinese spy chips.

“The Department of Homeland Security is aware of the media reports of a technology supply chain compromise,” the agency said. "At this time we have no reason to doubt the statements from the companies named in the story.”

The DHS issued its statement one day after The U.K.’s cybersecurity agency, the National Cyber Security Centre, came to a similar conclusion.

On Thursday, Bloomberg Businessweek claimed that tiny spy chips were secretly installed in servers of almost 30 American companies, including a major bank, government contractors and Apple and Amazon. According to the report, which cited 17 unidentified U.S. intelligence and company sources, Chinese military operatives, working under the orders of the Chinese government, added the malicious components to Super Micro Computer Inc. (SMCI) products manufactured at factories in the country.

The chips, which included code that forces products to accept changes to their software and to connect to outside computers, were allegedly shipped to the U.S. to give Beijing secret access to American internal networks. (See also: China Used Tiny Chip to Hack Apple, Amazon: Bloomberg.)

Apple and Amazon, two companies identified as victims of the hack, refuted Bloomberg’s claims in statements on their websites.

According to Reuters, Apple’s Vice President for Information Security George Stathakopoulos even wrote a letter to congress dismissing the report, saying the company had found no evidence of “malware or other malicious activity."

The iPhone maker’s recently retired general counsel, Bruce Sewell, also told Reuters he called the FBI's then-general counsel, James Baker, last year after being told by Bloomberg of an open investigation into Super Micro Computer, the hardware maker whose products have allegedly been implanted with malicious Chinese chips.

"I got on the phone with him personally and said, 'Do you know anything about this?'," Sewell said of his conversation with Baker. "He said, 'I've never heard of this, but give me 24 hours to make sure.' He called me back 24 hours later and said 'Nobody here knows what this story is about.'"

The share prices of Apple, Amazon and Super Micro were adversely impacted on Thursday and Friday by Bloomberg’s report. (See also: US-China Trade Friction May Last 20 Years: Jack Ma.)