China spy chips report adds pressure on Pentagon cloud security

Technology providers vying for a US$10 billion defence department cloud-computing contract may come under added pressure to prove their systems are secure after a report that China sneaked spy chips onto servers used by US companies including Amazon.com, a top contender for the Pentagon award.

Amazon subsidiary Amazon Web Services (AWS), the market leader in on-demand cloud computing platforms, was among almost 30 companies, including Apple, whose servers were infiltrated, according to a Bloomberg Businessweek report on Thursday that was based on more than a dozen sources in the government and private sector.

Apple, Amazon, server component supplier Super Micro Computer (Supermicro) and the Chinese government denied the report. When asked for comment on the implications for its Pentagon bid, Amazon pointed to its statement denying the report.

Security and procurement experts said Amazon’s prospects for winning the cloud services award may not be affected because it can argue that it was a victim that uncovered the problem. Amazon unearthed the breaches, which happened at factories run by subcontractors in China, alerted authorities and took action to limit the consequences, according to the report.

Still, the revelations increase pressure on the Pentagon as well as on Amazon and the other bidders to step up measures to secure their systems in a global marketplace where integral equipment is manufactured in China.