[0] - https://www.bloomberg.com/news/features/2018-10-04/the-big-h...
[1] - https://www.bloomberg.com/features/2021-supermicro/
[2] - https://www.schneier.com/blog/archives/2021/02/chinese-suppl...
[3] - https://www.theinformation.com/articles/apple-severed-ties-w...
His take was that it was very unlikely that it impacted exclusively Supermicro, though.
It was covered various places, including The Register https://www.theregister.com/2018/10/09/bloomberg_super_micro...
From what i recall, the story was very vague, there were no pictures of the specific chip, no pictures of the motherboard of the motherboard that would include serial, i.e. no details that would accompany a serious security research.
I thought it was supposed to be an incredibly tiny micro sitting on the bmc's boot flash to break inject vulnerabilities.
However they did not produce any concrete evidence, citing NDA between that security company and their client.
A malicious modification to the flash content would leave no physical evidence…
Just a random surface-mount component that someone pulled off another board or found on the floor behind a workbench. Allegedly.
Multiple security companies looked into this and found nothing malicious.
It's still nothing concrete, though. Their CEO basically said that they'd found one and that they couldn't say much more about it due to an NDA.
“Can’t give any more details - it’s hush hush !”
Yep. This was why there was a significant movement around mandating Hardware BOMs in both US and EU procurement in the early 2020s.
Also, the time period that the Bloomberg story took place was the late 2000s and early 2010s, when hardware supply chain security was much less mature.
I’m sure a brief glance at his shares and the company’s share price was enough to convince him that the “problem” was unlikely to be limited to just SuperMicro.
Amazing coincidence that his company could help others find out if they were impacted!
I don’t think it’s real. Yes, it’s plausible. But first of all, if someone actually surreptitiously put malicious chips onto motherboards en masse, we would have seen a photo of the alleged chip already. And second, there are easier, more effective, and less obvious ways of adding backdoors to networking equipment.
https://www.schneier.com/blog/archives/2018/11/that_bloomber...
HNers are acting reflexively skeptical (which isn't always a bad thing), but targeted supply chain based attacks conducted by a nation statein the manner described are actually doable, and back when I was still a line-level SWE this was when we started putting significant engineering effort into hardware tampering protections back in the 2015-17 period.
The hardware supply chain incident itself most likely happened in the late 2000s to early 2010s when hardware supply chain security wasn't top of mind as an attack surface.
Modchips targeting contemporaneous gaming systems like the PS1 and PS2 use a similar approach to the SuperMicro incident.
Bloomberg's tech coverage is not great from what I've seen. Last year they published a video which was intended to investigate GPUs being smuggled into China, but they couldn't get access to a data center so they basically said we don't know if it's true or not. Meanwhile an independent Youtuber with a fraction of the resources actually met and filmed the smugglers and the middlemen brokering the sales between them and the data centers. Bloomberg responded by filing a DMCA takedown of that video.
Something similar has been done in many video game console mod chips. IIRC, some of the mod chips manage it on an encrypted bus (which Bloomberg's claims do not require).
Here's one example of a mod chip for the PS1 which sniffs and modifies BIOS code in transit: https://github.com/kalymos/PsNee
"On PsNee, there are two separate mechanisms. One is the classic PS1 trick of watching the subchannel/Q data stream and injecting the SCEx symbols only when the drive is at the right place; the firmware literally tracks the read pattern with a hysteresis counter and then injects the authentication symbols on the fly. You can see the logic that watches the sector/subchannel pattern and then fires inject_SCEX(...) when the trigger condition is met.
PsNee also includes an optional PSone PAL BIOS patch mode which tells the installer to connect to the BIOS chip’s A18 and D2 pins, then waits for a specific A18 activity pattern and briefly drives D2 low for a few microseconds before releasing it back to high-impedance. That is not replacing the BIOS; it is timing a very short intervention onto the ROM data bus during fetch."
Maybe a tiny board eeprom would be I2C but why not just modify it instead of adding physically observable devices to mess with it?
I think the original story was largely propaganda
Look to the video game mod chip industry for your answer. Consoles obsessively verify system integrity from boot ROM to game launch. Most firmwares and OSes are encrypted, signed, hashed. Flipping bits in transit and perhaps only at specific times like system power on allows for the ROM to be read, verified, and checksummed correctly without detection of the implant. This makes the implant not only persistent, but stealthy. Even pulling the ROM chip and replacing it with a different IC would not remove the implant. And if the injection point were chosen carefully, implant functionality may reasonably be expected to persist across ROM updates. This is exactly the case with the PSNee mod chip I mention above. If I had to wager a guess, it'd be because the target, like console makers, was known to update and verify ROMs, which is SOP is any large org.
In terms of being physically observable... barely. You'd need an X-ray to find such a thing buried between PCB layers or inside another component. And not only that, you'd need to be routinely X-raying all your incoming equipment and comparing all the images. And even if you dug the thing out, you'd get a few dozen bytes of ROM out of it with no clue about who made it or how. Perhaps you might be able to determine origin for the silicon based on doping ratios and narrow it down to a few facilities operating at the right feature size. How many of us, upon receiving new equipment, immediately disassemble it to bits, individually x-ray each, then re-assemble it? Not many.
It's not a dumb idea. And whether or not actual evidence exists, exploiting the firmware on the board management controller is exactly the place where you can poke with the least effort for the greatest reward. That alone makes the attack plausible. Honestly surprised we haven't seen a BMC worm yet.
Excellent, thank you!
(Shifts entire portfolio)
SMCI has a pattern of missteps over the years, I would not qualify them as a solid future bet.
(And in case someone asks the question, no that is not a viable long-term strategy one's retirement savings because it's very much speculating and doesn't work AT ALL when the market is volatile or falling as a whole.)
You either take a gamble on something and hope it's good, or try to buy the same thing that someone else bought and reviewed.
If some market has large margins, it means it has some inefficiencies.
I thought about quite often while visiting a pub owned by the land lord renting out 150 rooms above. Each floor had a large industrial shared kitchen, shared bathrooms, toilets and a large shared living room. If people had 1-2 guests they would stay in their room, if they had 2-10 guests they would use the shared space, if they had 4-80 guests they would take the elevator to the pub. When one was bored with the guests or didn't have time they were left in the pub. Technically people had bar shifts in their rent contract (that you could buy your way out of) but there were plenty who enjoyed running the bar for free. Drinks were at cost. If you tried to tip or didn't take your change they left it on the counter and it would sit there for a day or two. The problem of the pinball machine earnings they solved with rounds of free drinks and chips.
When asked the owner said exploiting a bar was entirely to much work. If he wanted more money from the people living there he could just increase the rent?
Gross margin of zero would be mean you sell at exactly the cost to produce. Net margin of zero means you cover all your expenses including COGS. The only really difficult, practically impossible, thing would be doing both at the same time. Though, I could also see a case where you drive down net margins once sunk costs are paid and achieve both.
Doing so practically, or sustainably, in most circumstances would be uhh crazy… but it’s not impossible. Even then I think aiming for zero margin is a pretty credible tactic in eliminating competition if you can out sustain them.
TLDR; Weird? Sure. But not impossible. And even sort of likely if you’re trying to atrophy your competition out of existence.
Most inefficiencies come from hard-to-get-into markets, like telecom market is an oligopoly. Or information disbalance (business actors hide their pricing, khm.. hospitals khm..). A good government would try to remove them inefficiencies as much as possible (public pricing, easy-to-get capital), and make every business race-to-the-bottom competition.
no, that is a commodity market. Brand recognition and other kinds of markets are not like that.
If your model of an ideal market suggests that the realistic and practical approach is inefficient, i.e. your model fails when confronted by reality, your model is horseshit.
Also brand recognition and trust has real value because clearly people are willing to pay for it. Value isn't something intrinsic in an object. Value derives from what people are willing to pay. If people pay more for a rock with an Apple logo on it, then the rock with the Apple logo is more valuable. It's a quality other rocks don't have.
And what does "non-economic reasons" even mean? Should we all only drink tap water because it's cheaper and keeps us alive just as well? Or are we allowed to have some pleasure in life as well?
What in the...
Irrational behavior is when customers choose a product not for its utility divided by price (but note that pleasure is a type of utility).
Now, exactly how to calculate aforementioned utility is a big pandora box, the whole schools of economists grew up on that question.
Remember the 2018 accusations of spy chips implanted in supermicro motherboards that everyone denied so strongly?
It'd be easy to prove the existence of a pervasive "spy-chip" problem using a camera or a microscope. Unsurprisingly, neither Bloomberg nor it's quoted "experts" ever managed to do so, deapite loudly banging that drum.
Us splitting hairs is moot: the claims of subversion - whether by sw or hw - were unsubstantiated and uncorroborated, and remain so to date.
Oh and you'd get fined for damage to the pavement.
Then it’s a matter of how well your engineering/ops org is setup to deal with silly hardware issues and annoyances. Some orgs will burn dozens of hours on a random failure, some will burn an hour or treat the entire server as disposable due to aforementioned cost differences. If you are not built to run on cheaply engineered gear that has lots of “quality of life” sharp edges (including actual physical sharp edges!) then you are gonna have a bad time. Silly things like rack rails sucking will bite you and run up the costs far more than anyone would expect unless you have experience to predict and plan for such things beforehand.
Of course you do have the risk of a totally shit batch or model of server where all that goes out the window. I got particularly burned by some of their high density blade servers, where it was a similar story to yours. Total loss in the 7 figures on that one!
Totally agreed on their BMC/firmware department. Flashbacks to hours of calls with them trying to explain the basics. My favorite story from that group is arguing with them over what a UUID is - they thought it was just a randomly generated string. Worked until one didn’t pass parsing on some obscure deeply buried library and caused mysterious automation failures due to being keyed against chassis UUID… and that’s when they’d actually burn one into firmware in the first place.
It was also always a tradeoff of having to deal with cheaped out hardware engineering with supermicro or with some horrible enterprise quarterly numbers driven sales process with Dell.
Volume discounts from the big American brands are at least sometimes available at volumes that are remarkably close to one unit.
If you are unknown to them, you will not get discounts unless you order a quantity big enough.
Supermicro you consistently get a good/best price. It's already pretty low, so going from a 10 unit order to 1,000 unit order gives you some discount but nothing crazy most of the time.
Dell it's basically based on phase of the moon. I typically tried to time my smaller purchases to coincide with end of quarter. Wait for my rep to call me and ask if I had anything for him. If my little 6 unit order helped them or their boss hit whatever target you could get amazing deals. Stuff where they wouldn't budge 2 months earlier could be had at below supermicro pricing. More than a few times they would give such ridiculous pricing that I considered ordering way more than I needed to part out the components on eBay and just recycle the sheet metal and motherboard.
Other times/years (and different reps too!) would give a budgetary quote for a build and say they'd match a Supermicro quote which was nice, but took extra work and never feels great when you know you're using a vendor just to get pricing down with the one you actually want to go with.
I just hate dealing with that junk, so I tended to prefer Supermicro to reliably get decent pricing when I needed the gear vs. having a whole strategy around order timing.
Then you get into stuff like hard drives/SSD and that was a whole thing w/ Dell for quite some time. These days they are competitive but they were not always.
God, SuperMicro... never change. (But also, please go bankrupt and stop making trash.)
Anyone know if MSI are better?
Man, Kazakhstan must be an industrial powerhouse by now with all that German machinery. Can't wait for Kazakh EVs and semiconductors to hit the market.
Not investment advice, do you own research. I'm just someone on the Internet.
In fact there is an open gap that I'd expect it to close around $16.30 and another one around $19
I wonder if any of those $2.5B of smuggled chips ended up being used for those training runs.
Gamers Nexus did a whole deep dive which basically proved that Chinese researchers had access to whatever they wanted.
https://youtu.be/1H3xQaf7BFI?si=ojlxOC7uiPqZxv0N
edit: not sure if this was sarcasm
DeepSeek v3 was trained on 2,048 NVIDIA H800s. https://arxiv.org/abs/2412.19437
MiniMax M1 used 512 H800s. https://arxiv.org/abs/2506.13585
The H800 wasn't banned in the first round of export controls - but was after October 2023: https://www.cnbc.com/2023/10/17/us-bans-export-of-more-ai-ch...
Z.ai say they used Huawei hardware: https://www.theregister.com/2026/01/15/zhipu_glm_image_huawe...
Qwen and Kimi haven't disclosed their hardware as far as I can tell.
For example: https://www.tomshardware.com/tech-industry/artificial-intell...
Did you think the hesitancy of westerners engaging and relying on Chinese labs was due to vibes? There are fundamental cultural differences at play, wether we are comfortable admitting that or not.
I wonder if someone made a comment citing "fundamental cultural differences" with how Israeli people did business, it would be as well received.
From my experience, dealing with Israeli companies and Chinese companies are pretty much the same.
The $2.5B number is just these guys. It could be 10x in total.
And the entire Bloomberg takedown drama added fire to the flames.
And Bloomberg did a DMCA takedown through youtube, copystrike in parlance which pulled the video down for a week. GN had no recourse other than to wait and counterclaim.
Week timed out, Bloomberg did nothing but be the bully.
Louis Rossmann's excellent explainer video here on the Bloomberg bit: https://www.youtube.com/watch?v=6RJvrTC6oTI
As always, Louis is being a bit sensationalist and stretches the truth to whip up outrage. Contrary to what he claims, GN could have easily quoted the president without Bloomberg's video, and that would be fine. "that outlet now has a monopoly on who is able to quote the president" is just a totally false premise. Moreover he tries to argue that GN's video falls under fair use, because it's a 1 minute clip in a 3 hour video. However it's not hard to think of a rebuttal to this. If news organizations can copy each other's clips of official speeches, who would bother going out and making such recordings? Usually how this would be resolved would be by citing precedents, but he doesn't bother citing any.
Brother, wait until you learn about the associate press.
In U.S. copyright law, the four factors evaluated to judge fair use are:
1: Purpose and character of the use: including whether the use is commercial or nonprofit educational, and whether it is transformative.
2: Nature of the copyrighted work: for example, whether the work is more factual or more creative.
3: Amount and substantiality used: both how much was taken and whether it was a qualitatively important part of the work.
4: Effect on the market: whether the use harms the potential market for or value of the original work.
Courts weigh all four factors together. There is no fixed rule like "under 30 seconds" or "under 10%." GN's use seems to satisfy all four factors.
The same AP that licenses content to its members and charges non-members for the privilege of reusing their content?
"Many newspapers and broadcasters outside the United States are AP subscribers, paying a fee to use AP material without being contributing members of the cooperative. As part of their cooperative agreement with the AP, most member news organizations grant automatic permission for the AP to distribute their local news reports. "
> GN's use seems to satisfy all four factors.
It's weakest at #1 and #4.
#1: it's a commercial piece of work (so far as I can tell GN isn't a non-profit), and the use of the clip specifically isn't critical to the work. If you're critiquing a movie or something, and need to show a screengrab to get your point across, then that makes sense, but if the purpose of the video is just to establish "Trump said this", the video isn't really needed.
#4: see above regarding making recordings of official speeches.
Moreover I'm not trying to argue that GN is definitely not fair use, only that there's a plausible case otherwise. If there's actual disagreement over it's fair use or not, then the DMCA process is working as intended, and Bloomberg isn't abusing it as Louis implies.
[responses to edited-out portion of parent comment]
Re: #1, GN's work while commercial is an educational investigative journalism / documentary piece which are well established users of Free Use protection. GN's use is absolutely transformative.
#4: Bloomberg would have to prove a financial loss to have standing. That would mean that GN must have no other option than to use Bloomberg's clip, and pay the license, which I don't think would fly. GN would have just produced the segment differently.
> GN's use seems to satisfy all four factors.
I agree with the parent poster's point: "If news organizations can copy each other's clips of official speeches, who would bother going out and making such recordings?" When you see a head of state (or other VIP) making a speech and they show the media, there are normally 10+ different camera crews. If competitors can claim "fair use" for any of that footage, why would so many different media outlets send camera crews? The question answers itself.
A good counterpoint for fair use would be Wikipedia. They are very conservative about claiming fair use. I assume they have had pro bono (or not) lawyers review their policy and uses to confirm the strength of their claims. After hundreds of hours of reading Wiki, I can recall only once or twice ever seeing an artifact claim fair use. I think it was a severely downscaled photo of a no-longer-living person.
Additionally, folks don't like to rely on free use because the tests, though they have been well articulated, are inherently subjective and must be decided by a judge or jury. It's the sort of defense one wants to have available, but not depend on if possible, as a result.
Re: commercial use, in the US, just because a work is commercial does not automatically mean it loses fair use protection. Commerciality is only one factor of the four to be considered. Commercial parodies, for example, can still be fair use, especially where the work is transformative. IOW commerciality may weigh against fair use, but it is not dispositive. Google v Oracle involved fair use which was clearly commercial, for example.
GN's case would also be helped by the nature of the information being factual as opposed to artistic.
There are a lot of factors in whether or not an org can successfully take something to trial. Venue, judge, representation, jury selection, evidentiary rulings, all kinds of stuff. An imbalance in representation could easily swing it. So when I say that I think GN has a reasonable case, it's just me using the Supreme Court's rubric and some theoretical idealized court room which doesn't really exist. All I can say is that a good job could be done in arguing it. Whether or not GN could afford that work, or would want to, IDK.
In this case this case the purpose is for critique or review and it justifies fair use since the clip is only a small part of the video, GN isn't in the same business as BB and isn't substitutive for BB's work, and the clip was a recording of a factual event and had didn't have a substantial creative element.
Edit: Officially-debunked, I should note
(Allegedly) just some Bloomberg (alleged) bullshittery, (allegedly) posted to move the market.
And if it were posted to move the market, that would have been about the most cut and dry SEC violation possible, posted at a time when the federal government still enforced such things.
Jeez, if only they had said that all these unnamed pen testers had said they had found implants and had talked to all these unnamed federal authorities, I'd have approached the question with an entirely different set of Bayesian priors! Thanks for filling in the blanks on that.
And if it were posted to move the market, that would have been about the most cut and dry SEC violation possible, posted at a time when the federal government still enforced such things.
It's (allegedly) company policy: https://www.politico.com/blogs/media/2013/12/the-bloomberg-m...
Let's just say that none of this comes as any surprise.
Now, what people should be asking is how much Jensen knew. In May he said there was nothing going on. But the videos of the Chinese guy holding H1/200's ... never got to him?
Also interesting how they waited until just after GTC...
Can someone shed light on why China still couldn't copy the Nvidia GPUs in some form?
I understand its complex and there many parts to it, but which is the most complex part making it difficult for China to copy it?
Let's say they don't have access to 3nm process, what if they just use 12nm and create GPUs with much bigger size but comparable performance with CUDA compatibility? Or other option could be less tensor units, training will take longer, but they might be able to produce it cheaply
But there's a distinct time/value of investment equation with the current AI boom. The jury is at best still out on what that equation is for the goals of capital (it's increasingly looking like there's no moat), but if you're a national government trying to encourage local bleeding edge expertise in new fields like this it's quite a bit more clear.
They can copy it. And no, the software moat is not there if someone choose the blatant copy route. They just can't build it in the scale they want yet.
> what if they just use 12nm and create GPUs with much bigger size but comparable performance
Physics do not work this way :/
you could certainly use a larger process and clone chips at an area and power penalty. but area is the main factor in yield, and talking about power is really talking about "what's the highest clockrate can you can still cool".
so: a clone would work in physics, but it would be slow and hot and expensive (low yield). I think issues like propagation delay would be second- or third-order (the whole point of GPUs is to be latency-tolerant, after all).
Same with chips, efficiency, speed, etc all depend on good design, and cutting edge factors, if the main reason your chip isn't faster is because of the distance between your L1 cache and your core is far, then having a bigger node process but bigger chip won't make it quicker.
If you could steal all the designs at TSMC, and you had exactly the process that TSMC uses, you could definitely make counterfeits. If you didn't have TSMC's specific process, you could adapt the designs (to Intel or Samsung) with serious but not epic effort. If you couldn't make the processes similar (ie, want to fab on SMIC), you are basically back to RTL, and can look forward to the most expensive and time-consuming part of chip design.
This is nothing like copying a trivial, non-complex item like a car. Copying a modern jet engine is starting to get close (for instance, single-crystal blades), but even they are much simpler. I mention the latter because the largest, most resourced countries in the world have tried and are still trying.
Even if you had 'ai tools' guessing at component blocks on evaluation you would have to have some evaluation of the result.
And, thats assuming NVDA hasn't pulled a Masatoshi Shima type play on their designs (i.e. complex traps that could require lots of analysis to determine if they are real or fake)
Im not sure how much of a speedup even modern tooling/workflow could do reliably.
Even then,
The elephant in the room is that China is working on their own AI accelerators/etc, so while there can be benefit from -studying- the existing designs, however I think they do not want to clone regardless.
With processors it's customary to use the "Fan out of 4" metric as a measurement of the critical paths. It's the notional display for a gate with fan out of 4, which is the typical case for moving between latches/registers. Microprocessor critical paths are usually on the scale of ~10 FO4.
The largest chip at the moment is Cerebras's wafer scale accelerator. There the tile is basically at the reticule limit, and they worked with TSMC to develop a method to wire across the gaps between reticules.
They have alternatives, like the Tian supercomputer was originally built with Xeon Phi chips that have been replaced with their own domestic alternatives.
A big limitation is getting access to fab slots. Nvidia and Apple are very aggressive about buying up capacity from TSMC, etc, and China's own domestic fabs are improving fast but still not a real match, particularly for volume.
"sorry guys, I did something token-bad a while ago that got you more money."
that's the sort of meaculpa I'd expect to get rewarded these days...
M - Money/Greed
I - Ideology/Divided Loyalty
C - Coercion/Compromise
E - Ego
Sometimes, I think we look at people who are this wealthy and think they should be immune to these kinds of shenanigans, but I'd wager that the -ICE becomes even easier to exploit in people once they no longer need money, if they were already susceptible to it to begin with.
All these billionaires are unfathomably rich, and still slamming 60-80hr work weeks. They are not in it for the money.
Seems like that's a pretty obvious and straightforward power for a state to have. The state has to make foreign and domestic policy decisions, and to be effective that would have to include trade restrictions. Otherwise you could have situations like businessmen profiting by selling weapons to the enemy to kill his own countrymen--and there are sociopaths who'd do that.
> i never voted for the dingbats who control who is called a terrorist, let alone the people scared of china.
So what?
We do this already, though—we sell weapons to israel to kill americans living in palestine—Israel has certainly killed many more americans than Iran ever has. And yet, the sanctions are applied as if the situations were the opposite. Make it make sense!
This entire line of thinking just seems like delusion to comfort yourself for having to live under a shitty state.
The actions described in the article is both smuggling and a violation of sanctions.
A (classically) liberal society can only work if everyone is held to the same standard of the law.
