Apple denies Bloomberg report that its servers were hacked by Chinese spies

AP Images / J. Scott
Applewhite

• Chinese spies were able to add small, undocumented
  chips to motherboards in data servers bought by big US tech
  companies, according to a blockbuster investigation by
  Bloomberg published Thursday.
• Apple denies that it has ever found malicious chips in
  its servers.
• Apple also denies that it is under a national security
  “gag order,” squelching speculation that it was under pressure
  from the government to deny the Bloomberg
  report. 

On Thursday, Bloomberg
published a blockbuster investigation that
found that Chinese spies were able to plant tiny microchips on
motherboards in data servers supplied by SuperMicro to a slew of
American tech companies, including Apple.

The goal of the Chinese spies was reportedly to use these
microchips to gain access to sensitive corporate data and other
secrets through advanced hacking, according to Bloomberg

Apple is denying just about every fact in
the Bloomberg report, which says it discovered
suspicious chips in its servers in 2015. 

In a statement released on Thursday afternoon Apple says that the
company has never found any “malicious chips” or vulnerabilities
in “any server” and completely denies having any contact with the
“FBI or any other agency about such an incident” — directly
refuting several key claims in the report.  

“Despite numerous discussions across multiple teams and
organizations, no one at Apple has ever heard of this
investigation,”
according to Apple’s original statement, which said it was
first contacted by Bloomberg’s reporters about the alleged FBI
investigation in November 2017. 

It’s a pretty unequivocal denial. However, there was speculation
after that comment was released on Thursday that Apple could be
under a gag order — a possible way to reconcile Bloomberg’s
reporting with Apple’s denial. 

Certain federal investigations dealing with espionage and
national security can issue such orders, which preclude  the
recipient from event discussing the existence of the order. The
most common version is called a “national
security letter.” 

But Apple is denying that too, in an updated statement issued
later on Thursday, that it is under any gag order:

“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.”

It’s a difficult situation to reconcile. Bloomberg is a reputable
news outlet with a history of breaking big stories, and has
revealed conspiracies of this size and scope in the past. In a
statement to Business Insider earlier on Thursday, Bloomberg said
that it stood by its reporting, which cited 18 unnamed sources.

But Apple — and other companies involved, including Amazon — have
all made strongly worded statements completely denying the facts
reported by Bloomberg. For its part, Amazon said that it’s
“hard
to count” the inaccuracies in the Bloomberg story.

Given that these companies are publicly traded and this kind of
information is clearly material to its stock price, any
falsehoods in statements like these could land it in trouble with
federal authorities. 

Of note: In 2017, Apple
acknowledged downloading infected firmware that was related
to servers manufactured by SuperMicro.

So it’s a difficult situation to clearly parse and understand at
the moment — perhaps not surprising, given that the story
involves some of the most shadowy realms in the world, touching
both American and Chinese spies, high-tech manufacturing, and
hacking.

Read the Bloomberg report here>>

Apple’s full statement is reproduced below: 

The October 8, 2018 issue of Bloomberg Businessweek
incorrectly reports that Apple found “malicious chips” in servers
on its network in 2015. As Apple has repeatedly explained to
Bloomberg reporters and editors over the past 12 months, there is
no truth to these claims.

Apple provided Bloomberg Businessweek with the following
statement before their story was published:

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 have 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.

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.