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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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Hunting Vulnerabilities Using Frontier Models
Okta used frontier AI models GPT-5.5 Cyber and Mythos via OpenAI and Anthropic programs to scan millions of code lines for vulnerabilities.
Okta describes using frontier AI models, including GPT-5.5 Cyber Preview (TAC) and Mythos Preview, through OpenAI's Daybreak Cyber Partner Program and Anthropic's Project Glasswing to hunt vulnerabilities across its product codebase. The team built a custom Python orchestrator with strong isolation, vendor-agnostic model support, and four distinct scanning pipelines executed as isolated Codex or Claude Code sessions with progressive context loading to reduce context bloat. Human experts and AI agents worked both autonomously and in paired hunts, and Okta reports the best results when humans and agents taught each other.
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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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Zscaler Agentic SOC combines AI agents with zero trust telemetry
Zscaler launched Agentic SOC, an AI-agent-driven security operations platform combining zero trust telemetry with frontier models from Anthropic and OpenAI.
Zscaler announced Agentic SOC, a security operations platform built around specialized AI agents for triage, root-cause investigation, verdict assignment, and automated threat containment. The platform pairs Zscaler's zero trust telemetry, drawn from roughly 750 billion daily transactions and a large decoy mesh network, with frontier models from Anthropic and OpenAI plus proprietary threat intelligence. It features closed-loop inline remediation that can isolate compromised users, block command-and-control traffic, and cut off lateral movement, alongside a context graph that correlates third-party data. Continuous threat hunting combines AI automation with human experts from Zscaler and Red Canary, and customer Maire Tecnimont is cited as an early adopter.
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Introducing the CyberAgents Exchange AI Inspector: Rigorous review for community-built AI
Tenable and OpenAI launch the CyberAgents Exchange AI Inspector to security-review community-submitted AI agents, MCP servers, and skills using GPT Cyber models.
Tenable and OpenAI announced the CyberAgents Exchange AI Inspector, unveiled at OpenAI's "Intelligence at Work: Cyber Summit," to vet community-submitted AI agents, skills, MCP servers, and multi-agent playbooks in the CyberAgents Exchange registry. The process combines Tenable One AI Exposure scanning, OpenAI GPT Cyber model assessment, and human review, with reviews anchored to specific Git commits. The registry launched in August and hosts over 100 AI listings; the Inspector is expected to be available in September and has already detected prompt injection implemented via invisible Unicode tag characters in a SKILL.md file.
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50% of CISOs see Mythos as a sign to exit the profession
Survey of 1,001 US and UK CISOs finds 50% consider leaving the profession amid AI-driven pressure, personal liability concerns and burnout.
A survey of 1,001 CISOs in the US and UK found 50% say Anthropic's Mythos and similar cyber-capable AI models have made them consider exiting the profession, while 60% say board pressure to adopt AI is outpacing their governance capability. Average CISO tenure is cited at 18 months, and 78% worry about personal liability for security incidents, up from 56% a year earlier. Executives from BlackBerry, Databricks and IDC discuss D&O insurance, agentic security operations and phased low-risk AI adoption as partial responses.
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Autonomous AI Agents Compromise Thousands of Credentials in Under Six Hours
Google's GTIG reports threat actors using autonomous AI agents, credential stealers, and LLMs to steal AI models, API credentials, and harvest thousands of credentials.
Google Threat Intelligence Group says attackers are targeting proprietary AI models across healthcare, government, and media, exfiltrating API credentials, and co-opting victim cloud environments to run unauthorized AI workloads. TeamPCP (Altered Spider/UNC6780) is conducting supply chain compromises of PyPI, npm, and Docker Hub, deploying the SANDCLOCK and DUSTMAKER credential stealers, with DUSTMAKER using AI workspace poisoning and prompt injection for defense evasion. One financially motivated actor used an autonomous multi-agent framework to compromise thousands of third-party credentials in under six hours without human intervention. China-nexus groups UNC6508 and Basin Castle (Mustang Panda) used local open-weight LLMs and commercial LLMs like Gemini, Claude, and Codex for espionage tasks and evading provider monitoring.
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Microsoft Exchange Vulnerability CVE-2026-62911: What Administrators Should Do and How Zscaler Can Help
High-severity authentication bypass CVE-2026-62911 in Exchange Server has public exploit code; about 22,000 servers remain unpatched and internet-exposed.
Microsoft's August 2026 Patch Tuesday fixed CVE-2026-62911 (CVSS 8.0), an authentication bypass affecting Exchange Server 2016, 2019 and Subscription Edition. Successful exploitation lets an attacker with basic privileges take over all mailboxes on the targeted server, including reading and sending email and downloading attachments. As of September 1, Shadowserver identified roughly 22,000 unpatched, internet-exposed Exchange servers, including about 6,200 in the US and 5,100 in Germany. NCSC-NL confirmed working exploit code is publicly available, while CISA has not yet reported exploitation in the wild.
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