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Anthropic Says Seven China-Based AI Labs Ran Industrial-Scale Claude Distillation Attacks

Anthropic disrupted industrial-scale unauthorized Claude distillation by seven China-based AI labs, including Alibaba, DeepSeek, Moonshot, and Z.ai.

Anthropic identified and disrupted six illicit distillation campaigns since February 2026 run by seven China-based labs: Alibaba, Moonshot, DeepSeek, Z.ai (Zhipu), MiniMax, Xiaomi, and SenseTime. The largest, GTG-16005, involved 151 million exchanges targeting Claude Opus 4.6/4.7 chain-of-thought transcripts, peaking at roughly 3 million exchanges per day from more than 3,500 fraudulent accounts. Labs used proxy/relay services with fictitious identities, fake or stolen credit cards, harvested API keys, and purchased conversation transcripts from third-party resellers. Anthropic is countering by banning reseller accounts, summarizing internal reasoning before responding, and introducing preserved thinking in Fable 5.1, which encrypts reasoning and prevents context edits before it.

The Hacker News·Sep 11, 16:15 UTC · 5d agoAI safety & security 10 sources

Anthropic details distillation campaigns from Alibaba, Moonshot AI, and DeepSeek

Anthropic reports nearly 200 million Claude exchanges tied to distillation campaigns by Alibaba, Moonshot AI, and DeepSeek.

A new Anthropic report describes five distillation campaigns totaling nearly 200 million exchanges that extracted chain-of-thought traces from Claude to train competing models, targeting agentic tool use, coding, and reasoning capabilities. The largest campaign, attributed to Alibaba, accounted for 151 million exchanges between May and July 2026 across 3,500 accounts, peaking near three million exchanges per day, allegedly to produce training material for the Qwen model family. A Moonshot AI campaign routed roughly 300,000 requests over ten days through 5,000 accounts, primarily targeting Opus, including one task analyzing CCTV footage that appeared connected to the Chinese military. Attackers used prompt techniques, such as framing queries as katakana-only Japanese translation requests, to make Claude reveal its internal thinking traces.

TechCrunch · AI·updated Sep 12, 10:30 UTC · 4d ago·first Sep 10, 20:57 UTC · 5d agoAI safety & security 15 sources2

Rewiring Democracy Series on The Renovator

Schneier and Sanders link a four-part Rewiring Democracy essay series covering civic AI in Japan, Switzerland, Brazil and Scotland.

Bruce Schneier and Nathan E. Sanders announced links to their Rewiring Democracy essay series on The Renovator. The four parts cover Japan's digital democracy party Team Mirai, Switzerland's public AI model Apertus, Brazil's Open Knowledge civic technologists, and civic AI in Scotland. The post is a brief index without technical details.

Schneier on Security·Sep 1, 09:59 UTC · 15d agoAI policy

Claude Fable 5.1 Solves the Cyphral Distich, a 370-year-old cipher

Claude Fable 5.1 solved Sir Thomas Urquhart's 370-year-old Cyphral Distich cipher, recovering a hidden royalist prayer for Charles II.

Vals AI reports that Claude Fable 5.1 solved the Cyphral Distich, a 64-number cryptogram from Sir Thomas Urquhart's Logopandecteision unsolved since 1653, in 44 minutes using 176k tokens with no human hints. The key insight was that the cipher's key was the book itself: each number indexes a word in the corresponding Proquiritation, taking the first letter, yielding 'O GOD UPHOLD KING CHARLS THE SECOND AND MAKE HIM THE SUPREME RULER OF THIS LAND'. The model also deciphered the larger Cyphral Octastich (285 numbers) from The Jewel (1652) using page-based word indexing, recovering all but nine letters of a royalist prayer. The puzzle had been listed among Klaus Schmeh's Top 50 unsolved encrypted messages.

Hacker News · AI·Sep 13, 21:06 UTC · 2d agoAI researchHN 63↑ · 6 comments1· 1 read

Quoting Boris Cherny

Anthropic's Boris Cherny says AI-generated production code needs a higher quality bar enforced with tests, fuzzers, and automated reviews.

In remarks quoted by Simon Willison, Anthropic's Boris Cherny argued that production code written by Claude should meet a higher quality bar than human-written code. He described guardrails at Anthropic including lint rules, extensive tests, Claude-driven end-to-end tests, daily Claude-powered fuzzers, and automated code and security reviews. He warned that without such controls AI-generated code can become hard to maintain.

Simon Willison·Sep 11, 17:47 UTC · 5d agoAI tools & infra2

Weekly Update 515: Seeking Caffeine Utopia

Troy Hunt·Aug 3, 00:07 UTC · Aug 3, 2026Industry

Post-quantum cryptography adoption and the national security implications

Opinion analysis argues quantum computing favors nation-state espionage, leaving lagging post-quantum adoption at critical infrastructure exposed to harvest-now-decrypt-later attacks.

A CSO Online opinion piece argues that the extreme cost and infrastructure requirements of quantum computers will concentrate cryptographically relevant quantum capability among nation-states and a few corporations, favoring espionage and economic espionage over criminal monetization. It highlights harvest-now-decrypt-later risk to long-lived secrets, expert warnings such as Filippo Valsorda's, and diverging CRQC timelines with Google suggesting possibly 2029. The piece predicts governments, banks, and targeted sectors will adopt PQC first while utilities, small hospitals, and local government lag, widening exploitable gaps in critical infrastructure reminiscent of Salt Typhoon-style access.

CSO Online·Sep 9, 09:00 UTC · 7d agoIndustry

Separating AI's Technological Problems from Its Capitalism Problems

Schneier and Sanders argue AI's harms stem from capitalist incentives and governance gaps, not just technical limits, urging structural reform.

Writing with Nathan E. Sanders in Tech Policy Press, Bruce Schneier argues that AI's technological problems (hallucination, sycophancy, overconfidence) must be separated from socio-political problems created by capitalist market incentives. The essay contrasts US frontier-scale, energy-intensive development with China's incentive-driven leaner open models on commodity hardware, and cites Switzerland's Apertus model - trained on licensed data using public computing and renewable hydropower - as a public-interest alternative. It contends that proposals like research pauses, data-center moratoria, and federal screening conflate technology problems with governance problems, and that society faces independent choices on both axes.

Schneier on Security·Aug 15, 00:00 UTC · Aug 15, 2026AI policy

Italian tech collective Autistici/Inventati shuts down after US terrorist designation

Italian privacy collective Autistici/Inventati shut down after a US State Department terrorist designation triggered its domain suspension and bank account closure.

The volunteer-run Italian collective Autistici/Inventati, founded in 2001, announced Sunday it would shut down after the State Department labeled it an extremist group on August 26, 2026. The designation led the Public Interest Registry to suspend the group's .org domain on August 28 and its bank, Banca Etica, to suspend its account. The collective hosted roughly 16,000 email addresses, 1,500 websites, 5,500 mailing lists, and about 10,000 blogs, including the Noblogs platform. European Digital Rights warned the move sets a dangerous precedent for non-commercial European hosts and digital sovereignty.

The Record·Sep 8, 19:12 UTC · 8d agoPolicy & legal

Python Now Has a Post-Quantum Encryption Library

Schneier on Security·Aug 10, 11:02 UTC · Aug 10, 2026Industry1

Stately Taurus Activity in Southeast Asia Links to Bookworm Malware

Unit 42 links Stately Taurus APT activity in ASEAN region and Myanmar to the decade-old Bookworm malware family via infrastructure overlaps.

Unit 42 connected Stately Taurus (aka Mustang Panda) espionage activity targeting ASEAN-affiliated organizations and Myanmar to the Bookworm malware family, first published in 2015. Earlier attacks delivered the PubLoad stager via DLL sideloading, with a PubLoad variant communicating with C2 at 123.253.32[.]15 while mimicking Windows Update URLs. Three previously unreported loader samples from 2021-2022 used UUID-decoded shellcode loaded via heap allocation and API callbacks, ultimately decrypting and loading Bookworm DLLs. A ToneShell backdoor variant shared debug paths with Bookworm loaders, and the January 2024 CSIRT CTI post corroborated the Myanmar attacks.

Palo Alto Unit 42·Aug 17, 10:54 UTC · Aug 17, 2026Threat actor in the wild

Persistent Attempts at Cyberespionage Against Southeast Asian Government Target Have Links to Alloy Taurus

Alloy Taurus (GALLIUM) compromised Southeast Asian government networks from 2022 to 2023 using Exchange web shells and undocumented .NET backdoors Reshell and Zapoa.

Unit 42 tracked persistent multiwave intrusions at a Southeast Asian government starting in early 2022 and continuing through 2023, attributing the activity with moderate confidence to Alloy Taurus (aka GALLIUM), a Chinese state-aligned espionage group. Attackers exploited Exchange Server vulnerabilities to deploy web shells including China Chopper, then ran reconnaissance with Fscan and WebScan, created administrative accounts, and installed undocumented .NET backdoors named Reshell and Zapoa. They established resilience by installing SoftEther VPN, brute-forced Active Directory credentials with Kerbrute, and dumped credential stores with GoDumpLsass and LsassUnhooker. The campaign reflects long-term espionage tradecraft to maintain a foothold.

Palo Alto Unit 42·Aug 17, 10:54 UTC · Aug 17, 2026Threat actor in the wild1

I spent a day at a robot “carnival” in Shanghai. Here’s what I saw.

MIT Technology Review reports on China's humanoid robot industry push and embodied AI strategy from a Shanghai event.

A dispatch from a Shanghai humanoid robot 'carnival' describes China's push into embodied AI, embedding artificial intelligence into physical systems. Embodied AI is a key facet of China's latest five-year plan, and Chinese companies are already world leaders in humanoid robots. Nearly 90% of the market discussion centers on domestic adoption of the machines.

MIT Technology Review · AI·Aug 25, 09:00 UTC · 22d agoAI industry1

“Zlibrary my beloved”: Anthropic staff chats extolling piracy cited in Sony suit

Sony's copyright lawsuit against Anthropic now cites internal staff chats praising Z-Library piracy as evidence in the AI training-data dispute.

Sony's lawsuit against Anthropic cites internal staff chats in which employees extolled pirating books from Z-Library, according to Ars Technica. The suit forms part of the broader copyright dispute over torrented works used to train AI models. The article also notes AI-generated songs reaching the top of music charts, raising stakes for songwriters in the case.

Ars Technica · AI·Aug 31, 18:10 UTC · 16d agoAI policy

Mines, Minds, and Machines: The Journey of AI

Recorded Future essay traces AI's supply chain from minerals and chips to embodied AI, mapping geopolitical rivalry and cyber operations at every stage.

Recorded Future published an analysis following the supply chain of the fourth industrial revolution: minerals become chips, chips become data centers, and data centers become models that are acquiring physical capabilities. It argues geopolitical rivalry and cyber operations now run along every link, from mine to embodied AI machines.

Recorded Future·Aug 11, 00:00 UTC · Aug 11, 2026AI industry

Claude Fable 5.1 made me a really nice animated pelican

Anthropic launched Claude Fable 5.1, claiming gains in coding and long-running tasks, with 52.6% on Terminal-Bench-Science 0.1.

Anthropic released Claude Fable 5.1 (alongside Mythos 5.1), positioning it as a new standard for coding, knowledge work, and long-running problem-solving. The model scores 52.6% on Terminal-Bench-Science 0.1, up from 24.7% for Fable 5, versus 29.0% for Opus 5 and 22.4% for GPT-5.6 Sol. Simon Willison's hands-on test found the model produced an impressive animated pelican, though he notes other benchmarks show only slightly improved scores.

Simon Willison·Sep 1, 23:57 UTC · 14d agoModel release1

Quoting Rick Brewster

Paint.NET added a clean-room Direct2D rewrite for WINE, largely written by Anthropic's Claude and described as unreviewed 'vibe coded' code.

Rick Brewster says Paint.NET now ships a from-scratch, reverse-engineered Direct2D implementation (PaintDotNet.Windows.Direct2D1.Managed.dll) used under WINE via a /wine flag, since Direct2D was never completed well enough there. He credits the Claude coding assistant with writing most of the code, calling it largely 'vibe coded' and not thoroughly reviewed. Simon Willison shared the quote as an example of shipping AI-assisted systems code in production software.

Simon Willison·Sep 2, 05:50 UTC · 14d agoAI tools & infra1

Preparing for the Post-Quantum Era: A Call to Action

CISA and the G7 Cyber Security Working Group urge organizations to begin post-quantum cryptography migration, outlining five transition priorities.

CISA and the G7 Cyber Security Working Group jointly released "Preparing for the Post-Quantum Era: A Call to Action". The document urges governments and organizations to begin migrating sensitive data, authentication systems, and critical assets to post-quantum cryptography against emerging quantum computing threats. It defines five priorities: raising quantum-risk awareness, national PQC strategies, quantum-safe R&D, public-private partnerships, and integrating PQC into cybersecurity requirements and procurement.

CISA Advisories·Sep 3, 12:00 UTC · 13d agoPolicy & legal

Meme Coin Factories: Uncovering Large-Scale Manipulations on pump.fun

Large-scale pump.fun study of 15 million meme coins identifies five manipulation classes including wash trading and a Market-Manipulation-as-a-Service ecosystem.

Researchers analyzed all 15 million coins launched on pump.fun over the last two years plus large random samples of transaction data, identifying five manipulation classes: wash trading, creator address obfuscation, coordinated sells, copycat coins, and social media manipulation. Strategic actors bypass the platform interface and implement strategies in a highly automated, low-latency way by interacting directly with the blockchain. The study also uncovers Market-Manipulation-as-a-Service (MMaaS) third-party tools that let non-technical users run these manipulations, and proposes mitigations for traders, pump.fun, and regulators.

arXiv cs.CR·Sep 9, 14:35 UTC · 7d agoResearch

[AINews] Claude Fable/Mythos 5.1: new SOTA model, 75% cache price cut but 70% more output tokens

Anthropic launched Claude Fable 5.1 and Mythos 5.1, claiming new SOTA benchmarks, with 75% cache-read price cut and 1M-token context.

Anthropic released Claude Fable 5.1 and Mythos 5.1 as flagship models for coding and knowledge work, with a 1M-token context window and pricing of $10/$50 per million input/output tokens and cache reads cut 75% to $0.25. Artificial Analysis Intelligence Index scored Fable 5.1 at 66 versus 63 for Claude Opus 5, with HLE at 59.1% and Terminal-Bench v2.1 at 91.4%, though per-task cost rose ~20% due to 1.7x output token usage. Community analysis suggested Fable and Mythos may share underlying weights with different safety/routing behavior, and release notes highlighted Enterprise Frontier Safeguards and zero-data-retention support.

Latent Space·Sep 2, 07:46 UTC · 14d agoModel release2

New Python-Based Payload MechaFlounder Used by Chafer

Unit 42 identified MechaFlounder, a new Python backdoor used by the Chafer group to target a Turkish government entity via HTTP-based C2.

Unit 42 reports that in November 2018 the Chafer group targeted a Turkish government entity, reusing the win10-update[.]com infrastructure reported earlier in 2018 by ClearSky. The new secondary payload, tracked as MechaFlounder, is Python compiled with PyInstaller and acts as a backdoor supporting file upload/download and command execution. It beacons over HTTP using anomalous GET requests containing the username and hostname, suggesting a custom C2 server rather than a standard web server. Code overlap with OilRig's Clayside VBScript was noted, but Chafer and OilRig remain tracked as separate groups.

Palo Alto Unit 42·Aug 17, 13:22 UTC · Aug 17, 2026Threat actor

International Operation Disrupts Sality P2P Botnet

US-led international operation with Europol, CrowdStrike, and Shadowserver sinkholed the 20-year-old Sality P2P botnet, once exceeding one million infected machines.

On August 31, 2026, authorities from the US, Bulgaria, Hungary, and Romania, supported by Europol, CrowdStrike, and the Shadowserver Foundation, disrupted the Sality P2P botnet by sinkholing communications and seizing domains. Sality has operated for over 20 years, at its peak controlling more than one million infected machines used for credential theft, spam, proxy services, crypto-theft, and DDoS attacks, with over 11 million unique IP addresses linked to its infrastructure since 2017. The disruption exploited the botnet's super-peer reputation mechanism by removing legitimate peers via protocol-level manipulation and inserting sinkhole entries into emptied peer lists.

Infosecurity Magazine·Sep 3, 08:30 UTC · 13d agoMalware