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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 Confirms KB5002914 Update Breaks Copy and Paste on Excel
Microsoft confirms KB5002914 Excel security update silently breaks copy-paste in Excel 2016-2024, forcing admins to choose between usability and security fixes.
Microsoft added a known issue to KB5002914, the September 8, 2026 Excel security update, where paste, autofill, and formula dragging fail silently with no error in Excel 2016, 2019, 2021, and 2024. The update addresses remote code execution and information disclosure flaws including CVE-2026-81399, CVE-2026-81390, and CVE-2026-81954. No hotfix date has been published as of September 15, 2026; the only widely confirmed recovery is uninstalling or rolling back KB5002914, which drops the month's Excel security fixes.
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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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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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The hidden risks of shadow AI
UK NCSC guidance warns shadow AI use by employees risks data exposure, lost data control, and attacker exploitation of vulnerable AI agents.
The UK NCSC warns that 'shadow AI'—use of AI tools not captured in organizational approved systems—is widespread, with 71% of employees reporting unapproved AI tool use. Risks include exposure of sensitive company and customer data, loss of visibility and control when data goes to consumer AI services, and new attack opportunities if adversaries exploit vulnerabilities in AI agents with access to corporate systems. The NCSC advises reducing rather than eliminating the risk through positive security culture, understanding employee needs, offering secure alternatives, and following its joint guidance on careful adoption of agentic AI services.
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