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China’s hardware hack: massive implications if true

Bloomberg is running an utterly astounding story about a massive Chinese hardware hack that if true will have considerable political impact but truly enormous economic implications.

This will have a long-term bearish effect on China’s hitherto unchallengeable position as the overwhelmingly dominant manufacturer of computers, phones and high tech IT component.

And yet… I hesitate to immediately take this entire story at face value, precisely because the geo-political/economic implications are so dramatic that I can hear the sound of a great many axes grinding.

Still, it is certainly something I can well believe the Chinese government would do, even with the associated risk to China’s IT marketability. But then the same is probably true of the US government, I would not put such a thing past them either.

14 comments to China’s hardware hack: massive implications if true

  • Good stuff, Shawn. It is always wise to wait until such stories get subjected to the white heat of scrutiny before accepting them as the unalloyed truth. It will be very interesting to watch this story develop over the next few days!

  • Paul Marks

    The last time I checked the BBC and Sky News were still ignoring the story – if they can not blame President Trump or the vote for British independence (both of which they blame on Russian plots) they do not regard anything as news.

  • Alsadius

    If it was found by Amazon, that lends it credence. The NSA faking Chinese responsibility is plausible, but Amazon has no love for the NSA.

  • Runcie Balspune

    Oh noes – does this mean Trump was right ?

  • Jacob

    Could be this is fake news, used as a tool in Trump’s trade war with China?
    Interesting times.

  • Tim the Coder

    All your trapdoors are belong to US ?

  • Slartibartfarst

    Is the report of the hack true?
    The John Gruber at Daring Fireball item says:

    Apple and Amazon both vehemently deny the report.

    So it’s probably true, then.

  • Mary Contrary

    @Slartibartfarst. Corporate denials on this sort of thing are to be expected. But they’re usually mealy-mouthed and equivocal.

    This time, Apple has issued the Brett Kavanaugh of denials.

    I read that as “We’d say this isn’t true. But this time, we really really mean it’s not true”. And, well, you have to allow for the possibility that maybe when they say it isn’t true, it really isnt, or you’re in InfoWars territory.

    Hard to know what to think. I think Perry called this one right.

  • Slartibartfarst

    @Mary Contrary: Yes indeed. My initial view was already exactly the same as PerryDH’s view before I had even read of his view.
    But – and I apologise if I was being misleading (it was not intentional) – I was attempting a little joke, you see, in true “Yes Minister” fashion, where an official and unequivocal denial is taken as being a confirmation of the opposite. There was a lot of truth in the script of that oft times cynical TV series.

  • Rob

    Apple denied it. They just happened to replace all 7,000 servers in a few weeks, a colossal undertaking. As you do, you know.

    In a way placing the chip was both very clever and very stupid. Very clever from a technical point of view, disastrously stupid from an economic point of view.

  • There is an interesting article (of late last night) over on The Register, with title Decoding the Chinese Super Micro super spy-chip super-scandal: What do we know – and who is telling the truth?

    The initial technical analysis, I found well credible. Overall I found the article useful, though sagging a little in the middle. It picked up again (at least for me) towards the end.

    On possible motivations of various parties, one point I’ve not seen mentioned yet is the possibility of profit from share price manipulation. This of the allegedly involved parties, and the IT sector in general. Though I suppose it is a very elaborate and sophisticated story for such a thing.

    Best regards

  • Jacob

    This hack was discovered in 2015, but kept a well guarded secret until now. Now, suddenly, the story went public. Very good timing considering Trump’s trade war with China. Too good to be true…

  • Sam Duncan

    Apparently Bloomberg has a bit of a history of unfounded IT security scares. Which certainly doesn’t make this one automatically false, but it’s worth bearing in mind in light of all the denials.

    As that guy says though, IPMI is a whopping security hole anyway, even without nefarious ChiCom backdoor chips.

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