IBM, Lenovo server deal 'in limbo' amid security fears

US government 'worried'

IBM and Lenovo

The recent acquisition of IBM's low-end x86 server unit by China's Lenovo Group could be jeopardized over security worries raised by the US government.

People close to the matter have told the Wall Street Journal that there are significant concerns over the possibility of the servers being compromised by Chinese spies or hackers.

The maintenance of the servers rather than the hardware itself is what is bothering US security officials as well as the Committee of Foreign Investment in the US, a body that dissects deals that may pose a risk to US security.

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Unfounded fears?

Lenovo has already confirmed that it will not have access to the Secret servers because IBM will continue maintenance on the equipment for at least five years.

There are similariries between the US reaction to this deal and the Lenovo/IBM deal from 2006 which saw Lenovo purchase IBM's PC business unit but recent relevations of systematic and large scale government-backed spying from both sides is making the transaction a more delicate one.

That said, it is unlikely that the acquisition will be scuppered. However what could potentially happen is that the US governement could simply exclude IBM's x86 servers from any public tenders for sensitive or military sectors.

WSJ also reports that the US officials are also "somewhat uneasy" over the sale of HPC technology, one that "ties clusters of servers together to make them act like a more powerful machine"

Lenovo acquired IBM's x86 server portfolio back in January for $2.3 billion (about £1.4 billion, AU$2.6 billion) nearly a decade after it purchased IBM's personal computer unit.