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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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Week in review: Firmware-level Android backdoor found on tablets, Dell zero-day exploited since 2024
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Aurora Ransomware Operators Use Cursor AI in Attacks Against 10 Targets
Aurora ransomware operators used Cursor AI running Claude Sonnet to plan and execute intrusions against dozens of organizations in nine countries.
CloudSEK and Gambit Security analyzed exposed infrastructure tied to the Russian-speaking Aurora (Aur0ra) group, revealing months of activity against more than 20 organizations across nine countries between April and July 2026, with 33 victims listed by Ransomware.Live. The operator used the Cursor agentic coding assistant to plan attacks in Russian, including an AD CS exploitation plan, and Gambit observed Cursor Agent (running Anthropic's Claude Sonnet) performing hands-on exploitation tasks such as Nmap scanning, NetExec enumeration, NTLM relay, and certificate attacks against 10 targets. Attacks begin with email bombing plus IT help desk vishing via Xray-core, followed by SMB/LDAP/WinRM/RDP lateral movement, log clearing, Defender disabling, and exfiltration; the Windows and Linux/ESXi encryptors are built from a single Zig codebase, with shadow copy deletion and VM-killing before encryption.
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Hackers Abuse Claude AI Agents to Automate Cyberattacks, Exploitation and Data Theft
Anthropic reports actors including GTG-20006 (Midnight Blizzard-linked) and ShinyHunters clusters abused Claude AI agents to automate phishing, credential harvesting, and data theft against 20+ organizations.
Anthropic's September 2026 threat intelligence report describes threat actors operating multi-agent workflows built on Claude models to automate the cyber kill chain, from reconnaissance and phishing to exfiltration. The group GTG-20006, assessed as consistent with Midnight Blizzard, targeted Ukrainian and European government, diplomatic, defense, and intelligence entities plus the drone supply chain, with more than 20 organizations identified. Clusters tied to ShinyHunters used 10 AWS EC2 instances to decompile 1.8 million Android APKs for hard-coded secrets and, in a separate SaaS supply chain intrusion, dumped over 2,100 Azure AD token sets across 40+ corporate tenants in about 34 hours. Reported malware families include PowerChrome, WUEngine, Shadow C2, MiniPlasma, CloudSyncSvc, the GiftDrop Android RAT, and the DarkSword iOS exploit chain.
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Infostealer Logs Expose Replayable AI Tokens That Can Bypass MFA
Okta finds infostealer logs contain thousands of replayable AI session tokens and API keys, letting criminals bypass MFA and access services from Google, Anthropic and OpenAI.
Okta analyzed a 7 GB infostealer dump from August 2, 2026 covering 5,871 infected machines in 162 countries and found 555 of 44,791 JWTs related to AI services, plus 1,843 unexpired JWTs and JWEs (largely set by OpenAI via NextAuth.js) and 24 still-valid API keys for Google Gemini, OpenAI, Groq and OpenRouter. Valid session tokens and API keys can be replayed with anti-detect browsers like Camoufox to bypass credential and MFA checks, fueling an underground market for AI account access known as LLMjacking, where attackers rack up victims' AI compute bills. Some 17.7% of the JWTs contained plaintext PII usable for social engineering. Google's GTIG reported growing buyer demand for Claude, Gemini, Cursor and Devin credentials, and Mandiant handled an incident where an actor used an exposed GitHub PAT to deploy unauthorized AI infrastructure and scale high-performance compute.
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Researchers Use Claude to Port Pre-Auth RCE Exploit From One PLC Model to Another
Forescout used Anthropic's Claude to port a working pre-auth RCE exploit for CVE-2021-31886 between WAGO PLCs, executing ARM shellcode on live hardware.
Forescout Vedere Labs used Claude interactively to port an RCE exploit for CVE-2021-31886, a CVSS 9.8 stack buffer overflow in the Nucleus FTP server's USER command, from a WAGO 750-852 to a WAGO 750-831 PLC, running attacker-supplied ARM shellcode. The final RCE stage cost $535.74 in API usage over 8 hours 32 minutes, and a follow-up attempt to build a C2 implant permanently bricked the device. CERT@VDE lists many Nucleus V1-based WAGO models as vulnerable with no updates available; Siemens plans no Nucleus NET remediation. The work follows a joint NSA/CISA/FBI/DOE/EPA advisory warning of AI-generated exploitation scripts targeting internet-exposed Siemens S7 PLCs.
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Attackers turn to AI for help identifying files worth stealing
Gambit Security documents three threat actors using AI: a ransomware operator with Claude Code, credential harvester Zerofot, and the AI-built RAGE cryptomining framework.
Gambit Security examined three unrelated threat actors using AI across different stages of intrusions. A suspected operator tied to The Gentlemen ransomware-as-a-service used Claude Code running Claude Sonnet 4.6 in late June 2026 at six organizations, including an Australian energy utility, where it ran reconnaissance, ranked valuable databases, staged SQL Server dumps for exfiltration, and modified firewall configurations, accidentally taking one utility firewall offline. The Zerofot credential-harvesting operation, built with OpenAI Codex and Claude Code, collected 2,975 validated credentials from 1,742 hosts between April 5 and May 23, 2026, including SSH private keys and AWS access keys. The AI-generated RAGE Python framework exploits exposed Redis, Elasticsearch, Docker, Tomcat, and other services to harvest credentials and deploy cryptominers, guided at runtime by a DeepSeek-backed AI Orchestrator.
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⚡ Weekly Recap: Rogue AI Agents, Check Point Exploit, Slopsquatting, ClickFix Lures and More
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