Lenovo’s Server Purchase of IBM in Limbo Due to Security Concerns
Michael Hatamoto / 3 years ago
The U.S. government is studying the proposed sale of IBM’s low-end server offer to Chinese PC manufacturer Lenovo, concerned of possible national security problems.
Earlier in the year, both companies announced the $1.75B (£1.03B) deal, but there were concerns among U.S. legislators. Both the Committee on Foreign Investment members and U.S. security officials have concerns that x86 servers used in server rooms could give Chinese spies access to data.
The deal will likely be approved, but there are growing political concerns between Washington and Beijing over spying concerns.
Both IBM and Lenovo are speaking with U.S. legislators to get the deal finalized and approved by regulators. Company officials from IBM and Lenovo re-filed an approval application, hoping to get more time for an in-depth investigation.
IBM will offer server maintenance “for an extended period” once the deal is completed, which should help ease concerns.
Lenovo, the No. 1 global PC manufacturer, faced similar concerns when the company purchased the PC business from IBM in 2005. However, Lenovo PCs were later banned from U.S. military and State Department classified networks because of security problems.
Thank you to the Wall Street Journal for providing us with this information
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