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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.

CISA Advisories · 8d agoAdvisory in the wild1

Hackers Use Claude and GPT-Powered Tools to Help Breach Government and Financial Networks

Unit 42 links two Latin America campaigns where operators used Claude and GPT-4.1 during intrusions against government and financial targets.

Palo Alto Networks Unit 42 identified two activity clusters, CL-CRI-1131 and CL-CRI-1163, tied by shared SOCKS5 relay infrastructure and use of large language models during operations. The Mexican cluster targeted a transportation organization, federal ministries and water utilities in Mexico and Ecuador, while the Brazilian cluster used resume-themed phishing, custom remote-access Trojans and SockTz SOCKS5 tunneling against financial organizations. An exposed self-hosted NextChat interface on attacker infrastructure led researchers to assess operators used Claude and GPT-4.1 to generate workaround scripts and troubleshoot execution failures. Unit 42 noted AI reduced time needed to troubleshoot intrusions after initial access, rather than replacing the attacker.

Cyber Security News · 7d agoThreat actor in the wild1

Scam Attacks Taking Advantage of the Popularity of the Generative AI Wave

Unit 42 finds about 225 generative AI-themed domains registered daily since ChatGPT's launch, with nearly 29 percent suspicious, fueling scams and PUP delivery.

Palo Alto Networks analyzed new domain registrations containing generative AI keywords such as chatgpt, prompt, and sora since ChatGPT's November 2022 launch, observing around 225 GenAI-related registrations per day. About 28.75 percent of these domains are suspicious, a rate 22 times higher than for general new domains, with registration spikes aligning with milestones like Bing ChatGPT integration, the GPT-4 release, new GPTs, and OpenAI's Sora announcement. Over 72 percent of the domains use gpt or chatgpt keywords, and gpt domains show a 76 percent suspicious rate. Case studies cover PUP delivery, spam distribution, and monetized domain parking, with 35 percent of traffic to these domains directed at suspicious ones.

Palo Alto Unit 42 · Aug 17, 2026Phishing & fraud in the wild1

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.

Tenable Blog · 7d agoTools