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US government will probe Lenovo's IBM servers buy

Fear of back door shenanigans
Mon Apr 07 2014, 12:50
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THE UNITED STATES GOVERNMENT will take a look at Lenovo's acquisition of IBM's server division due to concerns regarding the potential for international espionage.

Bloomberg reported that IBM supplies server equipment to the Pentagon and that national security concerns have been raised.

The inter-agency Committee on Foreign Investment in the US (CFIUS) is set to investigate whether Chinese technology company Lenovo is a safe buyer for a company that builds products to process so much potentially sensitive data.

Application for the $2.3bn purchase, which was announced on 23 January, has been made to the CFIUS, however investigations might take up to 75 days.

Concerns might be alleviated by the decision to keep the IBM server business as a separate subsidiary for five years, with a possible extension. In the past, this was not the case as IBM's personal computer division was rebranded by Lenovo soon after its acquisition in 2005.

US officials will also have to consider the future safety of US utilities, weapons systems and other critical infrastructure to ensure that there is no potential risk of malware or hijacking.

This is not the first time that CFIUS has intervened in Chinese acquisitions in the computing sector, with Huawei and ZTE both having been subjected to mutterings about "deep concerns" when they began accelerated trading in the US in 2012.

The IBM deal is just one part of Lenovo's recent spending spree after it bought Motorola from Google at a cost of $3bn to gain a stronger foothold in western markets. µ

 

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