Cyber Risks in U.S. Supply Chains: Foreign Providers Under Scrutiny

A recent report by Bitsight has unveiled significant cyber risks within U.S. supply chains, primarily stemming from foreign-linked providers.  Analyzing data from 500,000 organizations and their associations with over 12,000 providers, the study highlights concerning ties to Chinese military-affiliated companies.

Dependence on Foreign-Linked Providers

The report reveals that one-third of the U.S. supply chain relies on software or services from companies designated by the Department of Defense as "Chinese Military Companies."  Additionally, two-thirds of the supply chain depends on firms with connections to Chinese state-linked entities, raising alarms about data security and potential espionage.

Notably, ByteDance Group, the parent company of TikTok, is linked to 35.4% of the U.S. market, underscoring the extensive reach of scrutinized firms across various industries.

The Threat of "Hidden Pillars"

Beyond prominent companies, the report sheds light on lesser-known software providers, termed "Hidden Pillars," which support critical sectors like energy and finance.  While larger firms often dominate security discussions, vulnerabilities within these smaller entities could have widespread repercussions across the supply chain.

Increase in Cyber Threats

In February 2025, the Bitsight Investigative Platform detected cyberattacks against 793 organizations, marking a sharp increase from 573 in January.  Ransomware group Clop was responsible for the highest number of attacks, reclaiming the top spot as it continued to leak data from victims of the Cleo attacks.

The U.S. remained the most targeted nation, accounting for 72% of recorded data thefts, highlighting the increasing cybersecurity risks faced by American companies.

Complexities in Provider Security

Providers within the supply chain face unique cybersecurity challenges due to larger attack surfaces and intricate vendor relationships.  Key findings indicate that providers have 2.5 times more products in use and ten times more internet-facing assets than their consumers, making them more susceptible to cyber threats.

Expert Insights

Ben Edwards, Principal Research Scientist at Bitsight, commented on the findings:

"Over the past year, we've seen several highly visible security incidents that highlight how incidents in the digital supply chain can have a massive ripple effect across the global economy."  He emphasizes the necessity for organizations to continuously evaluate their vendor relationships to mitigate potential risks.

Bitsight's report underscores the critical need for heightened vigilance and proactive measures in securing digital supply chains.  As foreign-linked providers, including those with ties to Chinese military and state entities, play substantial roles in U.S. supply chains, organizations must diligently assess and monitor these relationships to safeguard against escalating cyber threats.  With cyberattacks on the rise and ransomware groups like Clop increasing their activity, cybersecurity must remain a top priority for businesses navigating an increasingly interconnected digital landscape.

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