Security & Fraud

Intel’s Cloud Customers Eye Options After Chip Flaw Discovery

Intel

After revealing that there were serious flaws hidden in the software in almost every PC chip it sold in recent years, Intel now has to contend with the possibility of some of its cloud customers taking their business to its rivals.

According to Reuters, security researchers divulged that the flaws – called Meltdown and Spectre – could give hackers access to passwords or encryption keys on most types of smartphones, computers and cloud-based servers.

While Apple, Microsoft and other software makers have released patches to protect against the threats, those fixes can potentially slow down machines. As a result, some of Intel’s data center customers are looking into using microchips from other companies.

One alternative could be Advanced Micro Devices, which – like Intel – produces chips based on technology from ARM Holdings or graphics processing chips.

Additionally, several companies were experimenting with alternatives to Intel chips before the flaws were even announced.

Last March, Microsoft committed to using ARM processors for its Azure cloud service, while in December, Microsoft Azure utilized Advanced Micro Devices processors in its data centers. Last year, Google revealed that it is designing a server based on IBM’s Power9 processor, and Amazon Web Services is using AMD graphics processing units for a graphics design service.

In addition, both Qualcomm and Cavium are developing ARM chips aimed at data centers.

With Intel chips backing 98 percent of data center operations, a large number of clients jumping ship can have a serious impact on the chip maker’s bottom line. The company could be forced to offer discounts in order to retain the business.

While there have been no known cyberattacks caused by the vulnerabilities so far, lawyers filed a lawsuit in a San Jose, California federal court last week, seeking class-action status and compensation for people who bought vulnerable Intel chips or computers that came with them already installed.

More lawsuits are expected, and it is assumed that Intel’s biggest customers will quietly seek compensation for any harm caused by the flaws, including covering the cost to patch or replace machines.

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