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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.
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Microsoft Patch Tuesday for September 2026 — Snort rules and prominent vulnerabilities
Microsoft's September 2026 Patch Tuesday fixes 973 vulnerabilities, including 113 critical, with two Windows privilege-escalation bugs (CVE-2026-81963, CVE-2026-85880) exploited in the wild.
Microsoft's September 2026 security update addresses 973 vulnerabilities across its product lineup, 113 rated critical, of which 82 are remote code execution flaws. Two vulnerabilities are confirmed exploited in the wild: CVE-2026-81963, an elevation-of-privilege flaw in the Windows Update Stack (CVSS 7.8), and CVE-2026-85880, a heap-based buffer overflow in Windows Advanced Local Procedure Call (CVSS 7.8). Microsoft flags several bugs as more likely to be exploited, including a 9.8 RCE in Windows DNS Server (CVE-2026-69730), an 8.8 RCE in Windows Kerberos (CVE-2026-69676), and a 9.0 EoP in Spring Cloud Azure (CVE-2026-69854). Cisco Talos published accompanying Snort rules to detect exploitation attempts against the prominent flaws.
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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.
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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.
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