It says that a specialist unit of the People's Liberation Army secretly slipped computer microchips into the servers being manufactured by an American company, SuperMicro Computer Inc Servers are the heart of the internet. A server is a computer that manages networks of computers. And SuperMicro is one of the world's biggest manufacturers of the "brains", the motherboards, that go into servers around the world. One of SuperMicro's customers, a firm called Elemental, sent some of its servers for testing in 2015, and here's how Bloomberg described the discovery: "Nested on the servers’ motherboards, the testers found a tiny microchip, not much bigger than a grain of rice, that wasn’t part of the boards’ original design." This discovery prompted US authorities to investigate, and, according to Bloomberg: "During the ensuing top-secret probe, which remains open more than three years later, investigators determined that the chips allowed the attackers to create a stealth doorway into any network that included the altered machines. Vladimir Putin uses the West's systems against it. Credit:EPA "Multiple people familiar with the matter say investigators found that the chips had been inserted at factories run by manufacturing subcontractors in China."

Where are these altered machines to be found? In US Department of Defence data centres, the CIA’s drone operations, and the onboard networks of US Navy warships, according to the article. And, in the corporate sector, they're in the data centres of Apple Inc, reports Bloomberg. "And Elemental was just one of hundreds of SuperMicro customers." Loading So what would be the effect of such an infiltration? "It's not just the ability to steal data," says an expert at Central Queensland University, Ritesh Chugh, "but to initiate connections with other servers and getting those servers to perform functions," he says. Like what? "You could shut down the electricity system in Victoria," for instance, says Chugh, discipline leader in information systems and analysis. According to Bloomberg, the Chinese-implanted chips are not known to have been used in any such disruption. But, as the story says, a compromised server "could let the attackers alter how the device functioned, line by line, however they wanted, leaving no one the wiser". When the story was published, two things happened in short order. First, the companies involved denied elements of the story, in emphatic statements. So did the Chinese Foreign Affairs Ministry. The US intelligence agencies declined to comment. Against this, Bloomberg said its sources included six current and former senior US intelligence officials plus people in the companies involved, for a total of 17 claimed sources, all unnamed.

Second, the sharemarket investors pronounced their own verdict on the credibility of the story. Investors savaged the share price of SuperMicro in Friday trade on Wall Street. It lost almost half its value. Chinese tech companies also suffered. Hong Kong-listed shares in Lenovo, which makes PCs and servers, lost 13 per cent of their value. Shares in ZTE, maker of mobile phones and telecoms gear, lost 11 per cent. American politicians including the Republicans' Senator Ron Wyden, a member of the Senate Intelligence Committee, will now seek investigations of their own into the story. More will doubtless emerge by way of proof or disproof in time. Xi Jinping's plans are ambitious. Credit:EPA In the meantime, Chugh says that he finds the story "absolutely plausible". He says: "It's disconcerting not just at the organisational level but the individual level. There would be Australian companies that have purchased hardware from SuperMicro, an American company where the manufacturing was taking place in China. We know the network risks ... and you also would imagine that such chips are implanted in mobile phones."

The story also follows the Australian government's recent decision to ban any Chinese company from any role in building Australia's fifth-generation, or 5G, mobile network. And the US decision to ban any military purchases of mobile phones made by Chinese companies. Each of these developments attests to a rising mistrust of mainland Chinese companies and businesses as possible agents of the Chinese Communist Party. Loading There is an even larger question hanging over the subject. What needs to be done to fix the problem of any implanted spy chips? The risk can't be eliminated by software, says Chugh: "You have to physically remove it." To remove this and future risks, do companies and countries need to disentangle their supply chains from China? Chinese firms dominate the telecoms and computer components industries. Disconnecting is a task of daunting scale and cost. Beijing doesn't just mess with these industries and systems. China owns and controls dominant shares of them. And China proposes to be the world leader in all cutting-edge technologies of the future, including quantum computing and artificial intelligence.