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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

Nimbus Manticore Expands Toolset With TWOSTROKE

Group-IB found new infrastructure and TWOSTROKE-like malware used by IRGC-linked Nimbus Manticore, indicating expanded Middle East and Europe targeting.

Group-IB reported new Tortoiseshell infrastructure spanning Europe and the Middle East and two previously undocumented tools from IRGC-linked Nimbus Manticore (UNC1549): a reverse SSH tunneling utility connecting to 172.86.98.113 on port 443, and a C++ backdoor masquerading as wtsapi32.dll with three hard-coded C2 servers. The backdoor overlaps with TWOSTROKE and supports file transfer, execution, host information gathering, and persistence. Findings build on Kaspersky's report of the NightLedger backdoor and WebSocket tunnelers BridgeHead and ArcBridge, and suggest expanded targeting beyond the Middle East into Europe.

The Hacker News · 21d agoThreat actor in the wild

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, 2026Threat actor in the wild1

New PATCHCORD Backdoor Targets Afghan Telecom and Indian Critical Infrastructure

Acronis links APT36 (Transparent Tribe) to new backdoors PATCHCORD and SHEETCORD targeting Afghan Telecom and Indian government, defense, and energy networks.

Acronis TRU described an ongoing Pakistan-aligned campaign attributed with moderate confidence to APT36, delivering a previously undocumented C/C++ backdoor named PATCHCORD via fake VPN installers impersonating Afghan Telecom (AFTEL) and telecom management tools. PATCHCORD persists by hijacking browser shortcuts for Chrome, Edge, and Firefox, registers with a single C2 server, and executes shellcode and arbitrary cmd.exe commands. Infrastructure analysis revealed SHEETCORD, a Go backdoor combining SHEETCREEP and PATCHCORD features that uses Google Sheets for C2 and a PowerShell-based remote execution, delivered via a fake site mimicking India's National Informatics Center. APT36 has used PATCHCORD since at least March 2026, including a variant with anti-analysis features used against India's energy sector, and the toolkit includes antnium, GateSentinel, SuperShell, and exploits for CVE-2024-6387.

The Hacker News · Aug 15, 2026Threat actor in the wildCVE-2024-6387