Did China hack US motherboards?; Industrial-base report, previewed; New tool to fight fake news; ‘Light footprints’ mean shaky intel; And a bit more.

Big, if true: China put tiny spy chips on many U.S. servers. That’s the word from Bloomberg Businessweek, whose cover story published Thursday asserts that Beijing persuaded Chinese hardware manufacturers to install a surveillance chip, half the size of a grain of rice, on the motherboards of hundreds of thousands of data servers sold around the world by a U.S. company called Supermicro, including to Amazon and Apple. Bloomberg says those companies and others are working with the FBI and other U.S. government agencies to figure out what happened and what to do next.

The sources: Bloomberg cites 17 unnamed sources, including “six current and former senior national security officials” and three “senior insiders” at Apple.

But — big but — purportedly victimized companies say it’s not true. Apple’s 750-word statement begins: “The October 8, 2018 issue of Bloomberg Businessweek incorrectly reports that Apple found ‘malicious chips’ in servers on its network in 2015. As Apple has repeatedly explained to Bloomberg reporters and editors over the past 12 months, there is no truth to these claims.” Amazon’s own 500-word denial is signed by Steve Schmidt, the company’s Chief Information Security Officer.

“Someone is either wrong or lying,” writes John Gruber, a veteran observer of things Apple, adding: “What sense does it make that Apple discovered a profound security problem in Supermicro motherboards in May 2015, so serious that the company reported it to the FBI, but then didn’t sever ties with Supermicro until at least eight months later?”

“A horrendous tire fire for cyber security.” Security researcher The Grugq essentially throws up his hands at the story (“the Bloomberg description of whatever [the spy chip] does is gibberish”). But he leaves this warning: certain aspects of today’s servers are indeed “a raging tire fire” — that is, vulnerable to this and other kinds of hacks.

One more thing: Don’t forget to subscribe to Defense One Radio. Our newest episode posts later today.

On the podcast this week:

• Former Nebraska Senator and Pentagon chief Chuck Hagel came by our offices at the Watergate this week to help us celebrate Defense One’s fifth anniversary. Hagel sat down with Executive Editor Kevin Baron to talk about the Trump White House, the Greatest Generation, putting country over party, NATO, China and more.
• Then former Pentagon officials Rosa Brooks of the Georgetown University Law Center and Mara Karlin of the Johns Hopkins School of Advanced International Studies join Kevin to assess and expand on many of the ideas Secretary Hagel shared.

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From Defense One

Trump Wants Chinese Parts Out of American Weapons // Marcus Weisgerber: The White House will call for targeted investments in domestic manufacturing in an industrial-base report to be unveiled Friday.

‘It’s Complete Folly’: Hagel Says Trump Administration Can’t Threaten Iran Out of Syria // Katie Bo Williams: The former defense secretary says, “I don't know what our foreign policy objective is in the Middle East or almost anywhere else.”

New Tool Fights Fake News by Exposing the Websites That Create It // Patrick Tucker: MIT and Qatari researchers say it’s easier to expose a liar than debunk each of his lies.

‘Light Footprint’ Operations Keep US Troops in the Dark // Megan Karlshoej-Pedersen: With fewer troops to gather intelligence, American forces are vulnerable to locals’ manipulation.

A Missile-Defense Layer in Space Is Affordable and Makes Sense // Former MDA director Henry “Trey” Obering III and Rebeccah L. Heinrichs: Critics warn about sky-high price tags while blocking efforts to divine the actual cost.

Global Business Brief // Marcus Weisgerber: New details on Space Force proposal; Bell CEO talks V-280; DoD reverses course on proposed rule; and just a bit more…

Trump's 'Maximum-Pressure' Strategy for North Korea and Iran Will Fail // Vali Nasr, The Atlantic: The combined might of punishing sanctions, diplomatic isolation, or even the threat of war won’t compel surrender from North Korea and Iran.

Welcome to this Friday edition of The D Brief by Ben Watson and Bradley Peniston. And if you find this useful, consider forwarding it to a friend or colleague. On this day in 1969, a Cuban defector landed his Soviet -made MiG-17 at Homestead Air Force Base near Miami, Florida — revealing what the History Channel calls “an embarrassing breach of the United States’ air-defense capability.” Ten years later, the same pilot — Eduardo Guerra Jimenez — hijacked a Delta Airlines flight back to Havana.

America lost another soldier to a roadside bomb in Afghanistan this week, the public affairs folks at Resolute Support announced Thursday. The soldier’s death marks the eighth American troop killed in Afghanistan since January.
Also in Afghanistan: Erik Prince, still pushing that merc plan to save the 17-year-plus war. The New York Times has the story, here.

DoD to invest in industrial base: The Pentagon intends to invest in domestic manufacturing to reduce over-reliance on Chinese and other foreign-made parts in American weapons; the money will be requested in the fiscal 2020 budget, top defense officials told Marcus Weisgerber and other reporters Thursday. That’s the so-what of a long-awaited industrial base report, which has been been in the works for more than a year by a handful of government agencies.
China is mentioned 232 times in the report, which notes that the Middle Kingdom is the only producer of various chemicals needed in missiles and bombs. It also notes that Japan and European nations are the only suppliers of certain carbon fibers used in missiles, satellites, and space rockets; Germany is the prime supplier of special vacuum tubes for night vision goggles.
Much of the document’s findings and recommendations are classified because they describe areas of vulnerability in America’s supply chain. Chewning said a classified annex describes specific areas where the Pentagon will make its investments. Read on, here.

The White House has unveiled a new U.S. counterterrorism strategy, the first since the Obama White House did so in 2011. Some of the things you’ll learn from that document (PDF, here):

• “Domestic terrorism in the U.S. is on the rise.”
• Al-Qaeda in Syria is still (believed to be) plotting future attacks against the U.S. homeland;
• Guantanamo Bay still figures prominently for the future of U.S. CT policy.

Writes Seamus Hughes of the Program on Extremism at George Washington University: “with some notable exceptions here and there, this is largely a counterterrorism strategy that would have been written by any Administration. (left, right, or center).” Read CNN’s take, here; or Stars and Stripes’ take, here.

Pentagon quietly drops $12 million to repair a “secret” runway in Somalia, Air Force Times has the story, here.

ICYMI: South Korea thinks it can break the “stalemate” in U.S.-North Korea talks, the Washington Post reported Wednesday after speaking to Seoul’s Foreign Minister Kang Kyung-wha.
The gist: The "United States would declare an end to the Korean War" in exchange for "the verified closure of a key North Korean nuclear facility" at Yongbyon.
The outlook for that plan isn’t looking too promising. Read on, here.

This week we learned “fashion has long been influenced by nuclear weapons.” One of the stronger examples, via Samantha Blake, writing at Inkstickmedia.com: The “bikini,” named after the Marshall Islands atoll the U.S. targeted in an early nuclear test. Read on, here.

That Green Beret who got caught possibly trying to smuggle coke from Colombia to the U.S.? He (or pals he knew) may be facing more related charges, a Fort Walton paper reported Thursday off new info from the federal Drug Enforcement Administration office in Miami.
How he (or someone) tried to smuggle the stuff: In boxing bags, two of them containing about 90 pounds together. More here.
Related: A reason to watch this 1983 clip that traumatized one of your D Brief-ers as a child via “Scarface” re-runs on TBS.

And finally this week — er, next month really: Netflix is debuting a “Medal of Honor” series on Nov. 9 that “chronicles the extraordinary lives and deeds of eight service members awarded the nation’s highest commendation for valor,” Task & Purpose reported Thursday. Writes T&P: “Through a mix of archival footage, cinematic recreations, and commentary from historians, military leaders, and veterans, the series follows the recipients into heavy combat and then back home, where emotional interviews with friends and family members — and, in some cases, the recipients themselves — complete the stories of how each Medal of Honor was earned and the breadth of sacrifices entailed.” Watch the trailer here; or continue reading, here.

Have a safe weekend, everyone. And we’ll see you again next week!