Le no-no

Tyler Durden camera_lumina at hotmail.com
Mon Jan 31 13:30:31 PST 2005

Huh? There are IBM laptops with dedicated crypto chips? Although I don't 
claim to be any kind of an expert, I think this has to be wrong. Anyone know 
any different?

What may exist is some kind of FPGA crypo code, but even that I doubt.

(There's also the logical problem that the article writer seems to have 
missed: When one company buys another company they don't just buy that 
company's inventory and stuff, they buy the intellectual property. Who gives 
a crap if they own the chips if they also own the algorithm.)


>From: "R.A. Hettinga" <rah at shipwright.com>
>To: cryptography at metzdowd.com, cypherpunks at al-qaeda.net, 
>osint at yahoogroups.com
>Subject: Le no-no
>Date: Fri, 28 Jan 2005 22:48:18 -0500
>RED HERRING | The Business of Technology
>Le no-no
>The U.S. trips up a simple plan between IBM and Lenovo.
>January 28, 2005
>Homeland security is a cornerstone of the Bush Administration. But does
>halting the IBM-Lenovo deal make the United States any safer? The Committee
>on Foreign Investment in the United States (CFIUS) has decided to
>investigate the threat presented by the sale of IBM's personal computer
>business to China's Lenovo Group.
>Industry observers want to know what it is about this deal that irks the
>feds. "I don't know," says Jeff Moss, CEO of Black Hat, a computer security
>consulting firm. "It could be the loss of any manufacturing technology, any
>kind of proprietary technology that IBM had; but the Chinese could take a
>laptop apart themselves, too."
>Besides, most personal computers are already made in China-PC production is
>extremely commoditized, perhaps as much as transistors. "It is quite a
>stretch [to say] that the sale of the PC business to Lenovo would threaten
>American security," says Baizu Chen, a professor at the University of
>Southern California's Gordon S. Marshall School of Business. "Some senators
>want to make a noise. Eventually, this will pass. It's just transfer of
>One concern may have to do more with location than technology. The
>Washington Post quoted a member of the U.S.-China Economic and Security
>Review Commission-a Congressional panel created to watch commercial
>relations between the U.S. and China-as saying that Chinese computer
>experts could use an IBM facility in North Carolina as a base for
>industrial espionage.
>While the U.S. Treasury Department wouldn't confirm or deny the launch of
>the 45-day probe, IBM, which will still hold an 18.9 percent stake in the
>business, says it has filed the required notice with the committee and is
>cooperating fully. The company is confident in the process and outcome. One
>would hope so, given that the deal is worth $1.75 billion in cash, equity,
>and assumed debt.
>Where are the red flags? The U.S. government must demand action if a deal
>impacts domestic production needed for projected national defense
>requirements, or the capacity of domestic industries to meet national
>defense requirements, or the control of domestic industries by foreign
>citizens. The sale of IBM's money-losing PC unit doesn't quite cut it.
>It could be an issue of pride, say some-or perhaps cryptographic chips, say
>others. "Some of the IBM laptops have built-in cryptographic chips," says
>Pete Lindstrom, research director for Spire Securities. Mr. Lindstrom
>points out that if the intellectual property associated with cryptography
>is sold to a foreign country, one could potentially transfer a strong
>cryptographic capability to another country.
>But IBM is a multinational company, with employees across the globe. Would
>it really be so hard for someone to access such information? In the end, it
>all comes down to whom you trust. Legend Holdings owns the majority stake
>in Lenovo, and the Chinese government controls a large chunk of Legend. A
>few years ago, Global Crossing wanted to sell its telecommunications
>network to Hong Kong-based Hutchison Whampoa. It almost did-until the CFIUS
>stepped in. But that's a story IBM executives would rather not think about.
>R. A. Hettinga <mailto: rah at ibuc.com>
>The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
>44 Farquhar Street, Boston, MA 02131 USA
>"... however it may deserve respect for its usefulness and antiquity,
>[predicting the end of the world] has not been found agreeable to
>experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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