Apple denies explosive report of Chinese hacking on its servers

Apple has vigorously denied an explosive report from Bloomberg Businessweek claiming that Chinese spies infiltrated its supply chain and placed ‘spy’ chips in iCloud servers.

According to the report, Apple and Amazon found surveillance chips from China in their server hardware, which was provided by Super Micro located in the country. Upon the discovery, Amazon reportedly alerted U.S. authorities, which sent "a shudder through the intelligence community," Bloomberg wrote.

Bloomberg said the chips were installed during the manufacturing process, with U.S. officials reportedly calling it "the most significant supply chain attack known to have been carried out against American companies."

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In a statement to Bloomberg Businessweek that was also provided to Fox News, Apple said that Bloomberg's reporting is "inaccurate" and the sources in the story might be "wrong or misinformed." The lengthy statement can be found here (published separately from the original report), along with statements from Amazon, Super Micro and China’s Ministry of Foreign Affairs, which are also named in the story.

According to Bloomberg, the goal of the hack was not to gain consumer data, but rather to have "long-term access to high-value corporate secrets and sensitive government networks." The outlet noted that the investigation is still ongoing, three years after the initial discovery.

A source familiar with the CIA's inner workings told Fox Business' Hillary Vaughn that they doubted China was able to get a chip to "infiltrate" U.S. intelligence agencies.

The source also said they are "sure that the Chinese did in fact did do this to certain manufacturers...Whether not the specific servers purchased by that agency had that chip in the motherboard - that’s up in the air."

In addition to Apple and Amazon, almost 30 companies were affected by the breach, including a major bank and government contractors.

Apple ended its relationship with Super Micro in 2016, for what it called unrelated reasons. In a statement to CNBC, Apple said it found a single infected driver on one Super Micro server in a lab, calling it a one-time event.

Apple shares were lower by 1 percent in early Thursday trade, last trading at $229.62.

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