Amazon Offloaded Its Chinese Server Business Because it Was Compromised, Report Says (techcrunch.com)

An anonymous reader shares a report: It looks like Amazon's move to sell off its physical server business in China last year was because the unit had been compromised by a Chinese government spying program. That's according to a report from Bloomberg which details how the Chinese government infiltrated a number of U.S. companies by sneaking tiny chips onto motherboards from Supermicro. They then became part of servers deployed by the companies giving remote operatives potential access to data. It's a huge story that includes a comparatively small but important passage shedding light on Amazon's China deal last November -- the U.S. firm sold the physical server business to local partner Beijing Sinnet for 2 billion yuan, or around $300 million. That transaction initially sparked reports that AWS would exit China, but Amazon later clarified it planned to continue to operate its cloud services in China. Selling the physical server business, it said, was down to the fact that "Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services." While it is correct that China did introduce cybersecurity laws that placed restrictions on overseas firms and appeared to give the government unprecedented access to data, the Bloomberg report claims that Amazon's China-based servers were in fact offloaded because they were plagued with compromised servers.

Comments

On one hand this discourages foreign investment

[rsilvergun]

OTOH I'm not sure China wants foreign investment. This is the same country that spent a fortune figuring out how to make pens as nice as the Germans instead of just importing the occasional nice pen. China is very nationalistic.

Re:On one hand this discourages foreign investment

[CrimsonAvenger]

Historically, China has had next to no interest in importing anything if they could possibly help it.

For the last couple millenia, their general policy was "foreigners can come here to buy our (obviously superior) goods, but we have no need of, and no interest in, their obviously inferior (since not Chinese) goods."

Re:Only bad if the Chinese do it

[Holi]

Wasn't the NSA found to be acting outside of its charter by intercepting US Citizens communications, like all of them.

That is the NSA working for someone's interest, but certainly not ours.