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China-Based Artificial Intelligence Companies Conducting Industrial-Scale Distillation Campaigns Against U.S. AI Companies

NSA, CISA, and FBI warn DeepSeek, Alibaba, and other Chinese AI firms ran industrial-scale distillation of U.S. frontier models, threatening U.S. AI leadership.

A joint NSA, CISA, and FBI Cybersecurity Advisory (AA26-251A) says China-based firms DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI extracted billions of tokens from U.S. frontier models including Claude, GPT, Gemini, and Grok, likely with Chinese government knowledge. Campaigns running since at least late 2024 used native APIs, cloud providers, third-party aggregators, gray-market proxy "transfer stations", and shared premium subscriptions to bypass geographic restrictions, evade safeguards, and violate providers' terms of use. The agencies recommend detecting anomalous prompts, accounts, and usage patterns; subtly altering responses to suspected distillers; and cross-organization intelligence sharing. They also call DeepSeek's publicly cited $5.6M training cost misleading because it excludes data acquired through distillation.

CISA Advisories · 8d agoAdvisory in the wild1

7th September – Threat Intelligence Report

Check Point weekly bulletin: exploited SonicWall SMA 1000 zero-days (CVE-2026-83548/49), JFrog Artifactory auth bypass, and a 2.8M-patient Baylor Genetics breach.

Check Point's weekly bulletin covers breaches including Thomson Reuters' C-Track platform (court records across 11 US states and Canada), Baylor Genetics (2.8M patients and employees, SSNs included), Hit casinos in Slovenia, and Dropbox (~5,000 accounts via abused Lenovo email verification). SonicWall patched two exploited SMA 1000 zero-days, including CVE-2026-83548, a CVSS 10.0 pre-authentication SSRF, while JFrog fixed exploited authentication bypass CVE-2026-82329 (CVSS 9.8). Malware and actor coverage includes Gambling Goblin, JSCeal, Mirage Kitten's NodeRabbit/PollCat campaign, and DPRK Contagious Interview macOS activity, plus a FalconFlank privilege-escalation PoC against CrowdStrike Falcon.

Chinese AI firms are siphoning capabilities from American models, CISA warns

CISA, NSA and FBI warn Chinese AI firms including DeepSeek and Moonshot AI extracted billions of tokens from US frontier models via distillation campaigns.

A joint CISA, NSA and FBI advisory says China-based firms including DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun and Z.AI have run industrial-scale knowledge distillation campaigns against US frontier models such as Claude, GPT, Gemini and Grok since at least late 2024, likely with Chinese government knowledge. The campaigns used gray-market API proxies called transfer stations, premium account pools and traffic routing to bypass restrictions, evade safeguards and exfiltrate billions of tokens used to train models like DeepSeek R1/V3 and Kimi. The agencies challenge DeepSeek's reported $5.6 million training cost and recommend identity verification, usage monitoring, response variation, differential privacy and indicator sharing as defenses.

Help Net Security · 7d agoAdvisory in the wild1

Microsoft September 2026 Patch Tuesday fixes 966 flaws, 2 zero-days

Microsoft's September 2026 Patch Tuesday fixes a record 966 flaws, including two Windows zero-days actively exploited to gain SYSTEM privileges.

Microsoft's September 2026 Patch Tuesday addresses a record 966 vulnerabilities, including 105 rated Critical, 81 of them remote code execution bugs. Two zero-days were actively exploited: a Windows Update Stack link-following flaw and a Windows ALPC heap-based buffer overflow, both allowing local elevation to SYSTEM privileges. The ALPC flaw was reported by Volexity and Proofpoint researchers, while the Update Stack flaw was credited to Romain Deperne and the Microsoft Threat Intelligence Centre. Microsoft shared no details on how the flaws were exploited in attacks.

BleepingComputer · 8d agoAdvisory in the wildCVE-2026-69805CVE-2026-58649CVE-2026-69806+27 CVEs1

CISA tells operators to harden Siemens S7 PLCs. Here’s how to do it without disrupting production

CISA, NSA, FBI and other agencies warn of active targeting of internet-exposed Siemens S7 PLCs and urge patching, exposure removal and hardening.

Joint advisory AA26-231A from the NSA, CISA, FBI, Department of Energy and EPA warns that actors are actively targeting Siemens S7 PLCs using internet scanning, AI-assisted scripts and libraries such as Snap7 and python-snap7 over S7comm on TCP port 102. The advisory covers S7-200 through S7-1500 series controllers and recommends patching, removing internet exposure, access controls, monitoring and disabling unneeded services. Siemens states no new S7 vulnerabilities are involved, only misconfigurations addressed in existing ProductCERT guidance SSB-104599. The article details how to apply each measure without breaking production dependencies such as remote I/O, HMI links and diagnostics.

CSO Online · 8d agoAdvisory in the wild

CISA Red Team Fully Compromised Two Critical Infrastructure Orgs

CISA red teams achieved full domain and cloud compromise at two critical infrastructure orgs; one SOC never detected the intrusion.

CISA advisory AA26-237A documents two simultaneous red team assessments. Organization A (Government Services sector) missed the intrusion entirely, as default credentials on a web app, ADCS ESC1 abuse, and thousands of false-positive alerts let the red team reach sensitive business systems and read SOC email. Organization B (Water/Wastewater sector) detected, isolated, and reimaged hosts quickly, but both orgs lacked Conditional Access for workload identities, and B still exposed DCSync, Golden Ticket, and OT network attack paths.

Security Affairs · 21d agoAdvisory1

AI-fueled attacks pose ‘active threat’ to water, other sectors, U.S. agencies warn

NSA, CISA, FBI, DOE and EPA warn hackers are using AI-generated scripts to actively attack Siemens S7 PLCs across critical-infrastructure sectors.

A joint cybersecurity advisory from the NSA, CISA, FBI, Department of Energy and EPA warns of an active threat campaign targeting water, food, energy, chemical, manufacturing and commercial facilities via Siemens S7 Series programmable logic controllers. The actors use internet scanning to find exposed or poorly protected PLCs, then deploy AI-generated exploitation scripts disguised as legitimate monitoring tools, an OT first that dramatically lowers the expertise required for ICS attacks. Siemens says no new S7 vulnerabilities are involved, only exploitation of misconfigurations, and it is coordinating with CISA's ProductCERT. The warning follows a joint FBI-EPA advisory confirming attacks at water and wastewater utilities in at least 12 states since July 27.

CyberScoop · 27d agoAdvisory in the wild1