Date
17 December 2017
IBM servers are used in US communications networks and data centers that support the Pentagon's computer systems. Photo: Bloomberg
IBM servers are used in US communications networks and data centers that support the Pentagon's computer systems. Photo: Bloomberg

US worries over China hackers stall IBM-Lenovo server deal

Washington’s concerns over Chinese hackers have stalled a plan by International Business Machines Corp. to sell its computer-servers business to Lenovo Group Ltd. for US$2.3 billion.

IBM and Lenovo struck the x86 servers deal in January, but US security officials and the Committee on Foreign Investment in the United States (CFIUS), which is reviewing the acquisition, are worried the sale could provide Chinese agents or hackers easier access to sensitive US data, or that computer networks could be compromised through maintenance, the report said, citing people familiar with the matter. IBM’s x86 servers are used in US communications networks and data centers that support the Pentagon’s computer systems.

The two companies refiled their application for approval of the deal in May, according to the newspaper.

In order to assuage US concerns, IBM promised to continue to provide maintenance for the servers after the sale. But CFIUS is worried that when IBM’s service contract ends, the maintenance would be done by Lenovo, making the machines more vulnerable to unauthorized access by Chinese hackers.

Despite the security concerns, US regulators are likely to approve the deal, the report quoted the sources as saying.

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