Bloomberg Claims Chinese Operatives Compromised Tech Companies

October 5, 2018
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Bloomberg Businessweek sent the tech industry into a state of damage control and shock with a controversial news report it released on Thursday.

According to the media outlet, Chinese operatives were able to compromise motherboards sent to the two most valuable companies on the stock market: Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN). Bloomberg stated that microchips embedded on these motherboards could have been used to steal corporate information and trade secrets.

Bloomberg Quotes Numerous “Anonymous Sources”

The story claims that operatives working for Chinese interests inserted custom microchips on motherboards made by Super Micro Computer Inc. (NASDAQ: SMCI), a company based in Silicon Valley.

It is claimed that the chips, which were not part of an original design specification, were found in systems purchased by Apple and Amazon. The hardware, if it were not discovered, would have been able to collect and distribute (presumably via the internet) any data that was viewed or stored on a connected computer server.

While the report paints a particularly worrying scenario, all noted companies have denied that any such devices were ever found.

Apple Categorically Denies All Claims Made in the Bloomberg Story

In a statement released on Thursday evening, Apple stated that it “has never found malicious chips in our servers.” The company also addressed concerns that it was under legal obligation to deny the story, stating that “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.”

Apple further clarified, responding to claims that an FBI investigation had taken place in relation to the compromised motherboards, saying that “Despite numerous discussions across multiple teams and organizations, no one at Apple has ever heard of this investigation.”

Super Micro Computer Inc. Takes a Hard Hit to Stock Price

Despite Apple, Amazon, and Super Micro all denying claims made in the article, investors sold-off stock in large numbers. Super Micro was the worst hit…

This event is a timely reminder that news coverage can have a profound impact on investor confidence. Whether or not the story will leave lasting damage will need to be observed over Friday and the following week of trading.

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