Bloomberg Spy Chip – Bullshit? Part 2 – Audio Article


This is Part 2 of a two-part investigative deep-dive into the accusations of Bloomberg’s recent article, ‘The Big Hack’.
Written by Bob Flores, former CTO of the CIA, and Babak Pasdar, CEO of Acreto IoT Security.

Bloomberg Spy Chip – Bullshit? Part 2

Now let’s break down Bloomberg’s claims further. In the article they present a graphical image of a Supermicro motherboard and strip away components until the spy chip can be seen. The motherboard they present is a Supermicro B1DRi with an AOC-GEH-i4M add-on module. As shown on the Supermicro web site, the B1DRi is designed to host up to two Intel E-2500 v3 slash v4 CPUs and up to 256 Gb of 288 pin DDR4 memory and can be mounted to a sled with its own hard-disks. However it is not a standalone server and needs to be mounted in a Blade Enclosure to function.

The enclosure provides power, hosts a network switch and most importantly has a shared IPMI management board plugin. If the spy chip works through the IPMI, how can Bloomberg show the spy chip placed on the motherboard, when the IPMI for the board is an external module in the enclosure?

It looks like the IPMI must be individually linked to each server blade to manage that blade. The IPMI IoT is an external module plugged into the enclosure and to be used, it needs to be individually assigned to each of up to 16 server blades in the enclosure. If that is the case then there is a 1 in 16 chance of compromising a server and even then, it would be opportunistic and inconsistent depending on which blade the IPMI may be set to manage on boot.

Now – let’s discuss the chip Bloomberg presented in the article. If the insanity of the logistics to effectuate this hack is not enough to make you call Bloomberg’s story Bullshit, then their presentation of the spy chip should. The chip presented IS NOT A SPY CHIP, it is an RF Balun. A standard, off-the-shelf Surface Mount Device (SMD) that converts between balanced signals and unbalanced signals, hence the name Bal-Un. If you look at the Stesys or Farnell websites, they are two of the many component providers who sell them. You too can have one for a mere $1.67.

And if the pictures were supposed to be mere examples of what a spy chip might look like and the type of motherboard it could be embedded on, they certainly did not present it that way.

Also, consider that a motherboard is an incredibly complex piece of equipment. These types of motherboards need to be extremely high performance and extremely compact at the same time. This makes them extremely dense. They are almost always multi-layer boards where traces connecting the various electronic components exist on as many as a dozen different layers. And these systems are delicate, their operation requires the various electronic components to operate harmoniously. Frankensteining hardware to the system would be at the very least — challenging.

The majority of people within a company involved in R&D, design, procurement, manufacturing and testing of the motherboards are often sequestered into groups with access that is limited to specific functional domains. Very few people have complete access to the designs and schematics for the entire board. And this almost never includes subcontractors or some small security company out of Canada doing technical due diligence for a mundane acquisition. Furthermore, the people charged with manufacturing are typically not the same people who do quality assurance (QA). The job of QA is to test every permutation of every function. We have to believe that QA’s most fundamental tests would catch something as overt as communications where the spy chip tries to identify, fetch and inject packets on-the-fly.

The number of people that would need to be turned or paid off would be staggering. As many as 30 – 50 people would need to be engaged throughout the supply chain spanning multiple companies and countries. An amateurish and incredibly messy way to run a covert op.

How Everything Comes Together.

Because of the vague assertions, it is tough to argue definitively that any one aspect of the article is wrong, however when you put it all together:

1. We don’t know of many security companies that do reverse engineering on PCs as part of their due diligence.
2. Schematics are trade-secrets and almost never available for complex multi-layer motherboards. How could the security company have had access to schematics?
3. The sheer number of people that need to be involved in implementing the spy chips is staggering and doesn’t make sense for this type of effort.
4. The QA process, one known to be particularly meticulous, never caught the issue.
5. The ridiculous complexity of the hack where the sun, the moon and the stars have to align for it to work.
6. Not only is this compromise overt and easy to identify, but the vast majority of organizations have built-in defenses against this attack vector — especially Apple and Amazon.
7. The need for an Internet accessible IPMI network.
8. The need for the chip to fast-flux, connect to a remote system and pull-down compromise code while the system is booting.
9. The complexity of pulling a different code set on-the-fly for each of the hundreds of unique operating system and revision combinations.
10. The B1DRi motherboard being part of the blade system without any on-board IPMI, which can only be managed one blade at a time.
11. The vagueness of the charges and lack of any supplemental follow up, while Bloomberg continues to sit silent.
12. And trying to sell us that an off-the-shelf $1.67 RF Balun is a spy chip.

For these reasons, many of us believe the Bloomberg story just doesn’t have a leg to stand on. Bloomberg has made explosive allegations. They have had a drastic negative impact on Supermicro’s stock price — down 50% as of this writing. Their story is barely, if at all, viable. The information they provided was amateurishly vague. Their silence in the face of the backlash speaks volumes. And yet they continue to stand by their story and not recant. Add Bob Flores and Babak Pasdar to the growing list of skeptics.
If you have evidence, then present it and if you were conned it is understandable – but please stand up and own it.

Learn more or read online by visiting our web site: — On Twitter: @acretoio and if you haven’t done so, sign up for the Acreto IoT Security podcast. You can get it from Apple – Google or your favorite podcast app.

About Acreto IoT Security

Acreto IoT Security delivers advanced security for IoT Ecosystems, from the cloud. IoTs are slated to grow to 50 Billion by 2021. Acreto’s Ecosystem security protects all Clouds, users, applications, and purpose-built IoTs that are unable to defend themselves in-the-wild. The Acreto platform offers simplicity and agility, and is guaranteed to protect IoTs for their entire 8-20 year lifespan. The company is founded and led by an experienced management team, with multiple successful cloud security innovations. Learn more by visiting Acreto IoT Security on the web at or on Twitter @acretoio.

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