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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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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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AI agent authorization risks remain a gap in new NIST-CISA token security guidance
NIST and CISA release IR 8587 guidance on securing signed tokens, but AI agent authorization and delegation risks remain out of scope.
NIST, with CISA support, published 'Protecting Tokens and Assertions from Forgery, Theft, and Misuse' (NIST IR 8587), recommending continuous monitoring and tighter token lifecycle controls for SSO and API access. The guidance does not yet fully address AI agent identity, delegation chains, or prompt injection steering agents with valid tokens, and NIST says new or expanded standards are needed. Experts recommend treating AI agents as low-trust non-human identities, maintaining agent inventories, expiring credentials after task completion, and requiring human approval for high-risk actions. The report references shared-signal mechanisms like CAEP and RISC, and follows a May incident where a CISA contractor GitHub repository exposed AWS and GitHub tokens.
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NIST and CISA finalize playbook to stop token theft and forgery
NIST and CISA finalized NIST IR 8587, a playbook helping federal agencies and cloud providers defend identity tokens against theft and forgery.
The finalized NIST IR 8587 guidance covers protecting token signing keys, verifying tokens, lifetimes, revocation, session management, and dividing security responsibilities between cloud providers and customers. It cites an incident in which foreign actors forged tokens with a stolen commercial signing key to steal more than 60,000 emails from one government agency. It also recommends extending token protections to AI agents and preparing identity systems for a future post-quantum cryptography transition.
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CISA Urges Service Providers to Provide Transparent Updates During Major IT and OT Outages
CISA and FBI issued guidance urging service providers to deliver timely, transparent communications during major IT and OT outages.
CISA, with the FBI and international partners, released 'Communicating Under Pressure: Best Practices for Service Providers', urging providers to prepare crisis-communication procedures, provide timely status updates during IT/OT outages, and maintain out-of-band communication channels. The guidance warns that disruptions to telecom, cloud, energy, and water services can cascade across critical infrastructure. It aligns with CISA's CI Fortify initiative supporting IT/OT isolation and recovery.
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Windows 11 cumulative updates KB5124008 & KB5122880 released
Microsoft shipped mandatory September 2026 Patch Tuesday cumulative updates KB5124008 and KB5122880 for Windows 11, fixing vulnerabilities and adding features.
Microsoft released Windows 11 KB5124008 (versions 25H2/24H2) and KB5122880 (23H2) cumulative updates containing the September 2026 Patch Tuesday security patches, described as covering 1,000 vulnerabilities discovered in previous months. The updates are mandatory and add features including movable and resizable taskbars, Start menu customization, a Windows Search option to hide Bing and Store web suggestions, and Administrator Protection, a just-in-time admin privilege feature that is off by default and configurable via Intune OMA-URI or Group Policy.
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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.
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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.
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US agencies warn of AI-powered attacks on Siemens industrial controllers
NSA, CISA, FBI, DOE, and EPA warn threat actors use AI-assisted scripts and snap7 libraries to access internet-exposed Siemens S7 PLCs in critical infrastructure sectors.
NSA, CISA, FBI, DOE, and EPA issued a joint advisory warning that threat actors combine open-source snap7.dll/python-snap7 libraries with AI-generated scripts to gain read/write access to Siemens S7-200 through S7-1500 PLCs over the S7comm protocol. Actors use Censys and ZoomEye to find internet-exposed devices and abuse default or weak credentials, with activity assessed as persistent reconnaissance and positioning for future write operations. Agencies urge device inventory, patching, removing PLCs from the internet, and hardening; the pattern resembles Iran-linked CyberAv3ngers targeting of Rockwell, Schneider, and Siemens PLCs.
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