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Hackers Use Claude AI Agents to Automate Cyberattacks, Develop 0-Days and Evade Detection

Anthropic reports state-sponsored and criminal actors used Claude AI agents to automate attacks, discover zero-days, and rewrite malware to evade detection.

Anthropic Threat Intelligence's report covering December 2025 to August 2026 details AI-automated campaigns by espionage groups, criminals, and hacktivists. GTG-20006, aligned with Russia-linked Midnight Blizzard, targeted Ukrainian and European government and drone supply chains, used Claude to autonomously rebuild malware when detected, hijacked hotel Wi-Fi DNS to serve ClickFix lures, and stole over 300,000 identity records from a North African government. Operators linked to ShinyHunters decompiled roughly 1.8 million Android packages for hardcoded secrets and pivoted from an XSS flaw in a SaaS vendor into 200+ downstream organizations in about 34 hours, harvesting 2,100+ Azure AD token sets across 40 tenants. The Chinese-linked GTG-10007 ran parallel agent swarms that surfaced more than a dozen candidate zero-day vulnerabilities in a single month.

Cyber Security Newsupdated · 3d agofirst · 5d agoAI safety & security in the wild 15 sources1

Eliciting Weak-to-Strong Generalization with On-Policy Reverse Distillation

OPRD distillation enables weak-to-strong generalization by amplifying verifier-supported policy updates, outperforming existing RL and distillation methods with fewer student updates.

On-Policy Reverse Distillation (OPRD) evaluates a weak teacher's policy shift relative to its reference policy on student rollouts and amplifies the verifier-supported component of the student's policy gradient. This rescaling preserves the stationary points of policy optimization while letting the student learn beyond the teacher's capacity ceiling. In successive model transfer and multi-teacher distillation, OPRD achieves higher performance with fewer student updates than existing RL and distillation approaches, and response-style analysis shows students remain closer to verifier-RL-trained models than to their weak teachers.

Hugging Face daily papers · 8d agoAI research

Making Knowledge Distillation Cheap Enough to Run at Scale

Hugging Face blog by Multiverse Computing describes techniques making knowledge distillation cheap enough for large-scale training.

A Hugging Face blog post from Multiverse Computing (CAI) presents methods for reducing the cost of knowledge distillation so it can be run at scale. The post is aimed at practitioners compressing large models into smaller, cheaper ones for production use.

Hugging Face Blog · Aug 10, 2026AI research

Distill Globally, Adapt Locally: Reasoning Distillation and Product-Type Test-Time Training for Scalable Trade-Up Recommendation

A distillation framework compresses LLM reasoning into a 15.5M-parameter trade-up recommendation model reaching AUC 0.941 with product-type test-time training.

The paper targets trade-up recommendation, which identifies higher-quality alternatives that preserve customer purchase intent. A retrieval-augmented few-shot LLM teacher generates labels and rationales that supervise a compact embedding-pair classifier; at inference the 15.5M-parameter student uses only two precomputed 768-dimensional embeddings with no LLM calls. On 8,352 annotated pairs, label-only training scored AUC 0.912, reasoning distillation reached 0.924, and product-type test-time training lifted it to 0.941 with average precision 0.940. The distilled student is roughly 5,000x faster and 10,000x cheaper than direct LLM inference on a 100K-pair proxy catalog.

arXiv cs.AI / cs.LG / cs.CL · 11d agoAI research

Label-Guided Knowledge Distillation for 3D-CNNs in Action Recognition

LGKD uses ground-truth labels to guide feature distillation for 3D-CNNs, combining sample-wise and class-wise distillation for action recognition.

The paper proposes Label-Guided Knowledge Distillation (LGKD) for 3D-CNNs, noting that most video feature distillation methods are simple adaptations of image techniques that neglect temporal-dimension differences. LGKD combines sample-wise distillation, which uses label information and the teacher's probability distribution to guide features impacting temporal accuracy, with class-wise distillation employing a prototype network to capture relational knowledge among same-category samples. Experiments on the UCF101 and HMDB51 action recognition benchmarks achieve competitive results.

arXiv cs.AI / cs.LG / cs.CL · 4d agoAI research

Coupled Calibration and Learning: Mitigating Teacher Bias in LLM Distillation without Target-Domain Reward Feedback

CCL couples teacher calibration with student updates via token-level branching, provably removing teacher bias in LLM distillation.

The paper proposes Coupled Calibration and Learning (CCL), an LLM distillation algorithm that alternates teacher calibration using source-question reward feedback with student training on target questions under covariate shift. Each iteration calibrates the teacher on source feedback, trains the student on target questions, and lets the updated student inform subsequent calibration. The authors prove the student's expected KL divergence to the oracle student converges to zero at a polynomial rate, and show regularized direct matching error can remain bounded away from zero.

arXiv cs.AI / cs.LG / cs.CL · 17h agoAI research

One Symptom, Three Levers: A Critical Review of On-Policy Self-Distillation

A review paper frames on-policy self-distillation collapse as governed by three levers: token weighting, privileged information, and guidance decay.

The paper critically reviews On-Policy Self-Distillation (OPSD), where a language model trains on its own generations scored token-by-token by a teacher conditioned on privileged information such as reference solutions or environment feedback. It identifies collapse, the progressive narrowing of producible reasoning paths, as the dominant failure mode and analyzes it through three levers: signal weighting, the nature of privileged information, and teacher dynamics. The review is restricted to mathematical reasoning, reports no new experiments, and offers a shared vocabulary separating settled findings from disputed ones.

Hugging Face daily papers · 21d agoAI research

Negative Self-Distillation: Learning to Reason by Avoiding Flaws

Researchers propose Negative Self-Distillation (NSD), a label-free LLM self-improvement method that diverges from self-generated flawed reasoning rather than imitating privileged solutions.

The authors show On-Policy Self-Distillation can degrade complex reasoning by forcing imitation of artificially confident traces built on privileged information, suppressing uncertainty and self-correction. NSD instead generates a question-specific negative condition — such as acting as a 'careless reasoner' — and pushes the model's distribution away from it without ground-truth labels. A dynamic gating mechanism isolates reasoning-critical tokens so gradient updates fix behavioral flaws without damaging foundational linguistic capabilities. NSD consistently outperforms OPSD and other label-free, self-bootstrapping reinforcement learning baselines.

Hugging Face daily papers · 6d agoAI research1

Large Language Models for HVAC Operations in Building Energy Systems: A Critical Review of Methods, Applications, and Deployment Readiness

Systematic review of 66 studies finds LLMs for HVAC operations are mostly research-stage, with no ready-now deployment and only four pilot-level studies.

A critical review of 66 peer-reviewed studies from 2023 to March 2026 examines LLMs for HVAC operations in building energy systems. Only four studies reach pilot-level evidence, none reports sustained operational deployment, and 63 of 66 are research-only. Conventional ML, MPC, and RL remain dominant for high-frequency control and short-horizon forecasting, and the evidence supports LLMs primarily as semantic and workflow layers rather than autonomous controllers.

arXiv cs.AI / cs.LG / cs.CL · 11d agoAI research

Verify Before You Distill: Prompt-Level Teacher Gating for On-Policy Distillation

TGOPD verifies teacher reliability per prompt before on-policy distillation, outperforming vanilla OPD across math, code, and instruction benchmarks.

Teacher-Gated On-Policy Distillation (TGOPD) estimates teacher reliability from verifier-scored teacher probes and routes each prompt either to dense on-policy distillation or to verifier-grounded GRPO, avoiding misleading updates from confidently wrong teachers under mode-seeking reverse KL. Across 4B and 35B students in mathematics, code, and instruction following, TGOPD outperforms vanilla OPD in all six single-domain settings and achieves higher seven-benchmark averages under multi-domain training. It also raises teacher-node GPU utilization from 9.8% to 78.9% in the measured 4B single-domain run by reusing idle teacher capacity.

Hugging Face daily papers · 14d agoAI research

Discrete Beckmann Transport Models for One-Step Language Modeling and Reasoning

DBTM achieves one-step text generation via a time-independent transport map trained directly from data, removing pretrained teacher distillation.

Discrete Beckmann Transport Models (DBTM) build a time-independent flow whose autonomous transport map provably carries any point in ambient space to a fixed point on simplex vertices in a single step. The fixed-point property is characterized by a conservation equation whose residual can be minimized directly from data, eliminating the need for a teacher flow, distillation, and time conditioning. A partial-context interpolant extension turns additional function evaluations into refinement steps rather than ODE integration steps. On language modeling and reasoning tasks, DBTM's one- and few-step generation improves quality and accuracy over discrete diffusion and continuous flow baselines.

arXiv cs.AI / cs.LG / cs.CL · 1d agoAI research

Model-Aware Schedules Improve Generation via Fiberwise Optimal Transport

Researchers introduce model-aware diffusion schedules via fiberwise optimal transport, cutting flow-matching FID on CIFAR-10 by 38.6% at 16 function evaluations.

The paper proposes constructing diffusion and flow-matching sampling schedules from a fiberwise prediction risk defined via optimal transport, combined with coefficient-path kinetic action, yielding a closed-form time allocation. Across DDPM and flow-matching experiments spanning targets, datasets, and architectures, the schedules beat model-agnostic baselines, including a 38.6% relative FID reduction for flow matching on CIFAR-10 at 16 function evaluations. Normalized fiberwise-risk profiles from independently trained models align closely, suggesting empirical universality, and a frozen analytic allocation template retains most of the gains.

arXiv cs.AI / cs.LG / cs.CL · 5d agoAI research

Can Foundation Models Moderate Online Content? Evaluating Instruction- vs. Example-Driven Policy Operationalization

ModerationBench shows foundation models can nearly triple Bluesky's moderation F1 (0.60 vs 0.22), with instruction- and example-driven guidance performing comparably.

Researchers built ModerationBench, a new benchmark of 4,000 manually annotated in-the-wild posts from Bluesky, to test whether foundation models can reliably operationalize content moderation policies. They systematically compare instruction-driven guidance (reasoning from policy precepts) with example-driven guidance (generalizing from precedents) for Vision-Language Models. Both paradigms achieve comparable peak effectiveness, and foundation models nearly triple the F1 of Bluesky's deployed moderation system on Random Posts (0.60 vs 0.22).

arXiv cs.AI / cs.LG / cs.CL · 6d agoAI research1

Model ML completes finance work more efficiently with GPT-5.6 Sol

OpenAI customer Model ML uses GPT-5.6 Sol to turn finance research into editable, traceable decks and workbooks.

OpenAI published a customer story describing how Model ML uses GPT-5.6 Sol for finance work. The model carries tasks from research and analysis through to editable, traceable PowerPoint decks and Excel workbooks. This is a product adoption case rather than a new model release.

OpenAI News · Aug 10, 2026AI industry

Reduced-Space Multi-Fidelity Bayesian Optimization of Process Simulation Models

RS-MFBO couples global sensitivity analysis with fidelity-augmented Gaussian processes to slash costly high-fidelity simulation runs in industrial flowsheet optimization.

The paper presents RS-MFBO, a reduced-space multi-fidelity Bayesian optimization framework for high-dimensional, expensive black-box functions. It integrates Global Sensitivity Analysis for dimensionality reduction with a fidelity-augmented Gaussian process and a cost-aware acquisition strategy featuring cooldown and promotion mechanisms. Validation on a plasmid DNA bioprocess (SuperPro Designer) and a green fuel synthesis plant (Aspen HYSYS) shows substantial reductions in high-fidelity evaluations while remaining competitive with single-fidelity baselines.

arXiv cs.AI / cs.LG / cs.CL · 17h agoAI research

Evaluating Time-Series Foundation Models and Multimodal Dietary Context for CGM Forecasting

Study finds zero-shot time-series foundation models underperform on CGM forecasting; fine-tuned Chronos-Bolt cuts RMSE up to 18.4% and dietary context adds signal.

The paper evaluates time-series foundation models for continuous glucose monitoring forecasting across eight public datasets covering Type 1 diabetes, Type 2 diabetes, and non-diabetes populations. Under a unified protocol, zero-shot foundation models did not consistently outperform baselines like Elastic Net and PatchTST, but lightweight fine-tuning did, with fine-tuned Chronos-Bolt reducing RMSE by 6.5%-18.4% in the T1D cohort and 8.6%-18.2% in the non-diabetes/T2D cohort. A residual-based fusion framework adding dietary context from CGMacros reduced overall RMSE by about 3% and postprandial RMSE by about 15% versus CGM-only baselines.

arXiv cs.AI / cs.LG / cs.CL · 5d agoAI research

Bridging Control, Inference, Transport, and Thermodynamics: From Theory to Applications in Learning

Review connects control theory, optimal transport, probabilistic inference, thermodynamics, and machine learning via free-energy optimization under constraints.

The review unifies five fields: control theory, optimal transport, probabilistic inference, non-equilibrium thermodynamics, and machine learning. The common conceptual thread is optimization of free-energy-like functionals under dynamical or statistical constraints. Selected applications are presented in reinforcement learning, variational inference, and generative modeling. The tutorial-style text assumes no prior familiarity and begins from physics principles.

arXiv cs.AI / cs.LG / cs.CL · 1d agoAI research

Competence-Gated Pooling of Language Models and Priors for Event Forecasting

Paper proposes a competence gate pooling language model forecasts with external priors, improving Brier score from 0.0771 to 0.0732 across 2,357 binary questions.

The paper defines a language model's relative competence as its marginal value beyond an available external forecast, and derives conditions under Brier loss where model disagreement improves that forecast. A competence gate estimates domain-level source weights from resolved outcomes, shrinks uncertain estimates toward a global weight, and recalibrates the pooled forecast. Across 2,357 resolved binary questions and five language models, it improves the external baseline from 0.0771 to 0.0732 Brier and beats global forecast combinations, though it defers to the market on ForecastBench. Across four Qwen models, verbal confidence failed to identify when the model outperformed the external forecast, while outcome-estimated competence supported better abstention.

Hugging Face daily papers · 6d agoAI research

[AINews] 10% worse, 100x cheaper, 10000x faster: Why Simulation is taking over

Latent Space argues AI training pipeline stages—rewards, data, teachers, curricula, environments—are flipping from human-made to model-made simulation.

Latent Space's AINews essay traces how each component of AI training has turned synthetic since 2022: reward models (InstructGPT, RLAIF), synthetic pretraining data (Microsoft Phi, NVIDIA Nemotron-4 340B), model teachers (Alpaca, DeepSeek-R1 distillation), and self-generated curricula (Self-Rewarding Language Models, SPIN). In 2026 it highlights Karpathy's autoresearch loop—700 experiments yielding 20 kept improvements, cutting GPT-2 training time from 2.02 to 1.80 hours—and Z.ai's GLM-5.3 fully synthetic RL environment, judging, and verification stack. It frames these shifts as 'simulation': 10% worse but 100x cheaper and 10,000x faster than human equivalents.

Latent Space · 25d agoAI industry

Safety for Whom? Boundary-Aware Self-Distillation for Controlled LLM Safety Refusal

A self-distillation safety framework tunes narrow-boundary refusals in Qwen3-8B, raising target-domain refusal to 84.75% while cutting over-refusal from 15.20% to 5.20%.

The paper formulates narrow-boundary safety, where deployments need refusals within specific topics rather than whole subjects, and proposes an offline self-generated framework with controlled topic generation, escalating retries, and harmful-benign boundary pairs. On political persuasion with Qwen3-8B, the method raised target-domain refusal from 9.47% to 84.75% and cut the mean unsafe-response rate across three broader benchmarks from 26.26% to 0.14%. Verified target-model responses reduced over-refusal from 15.20% to 5.20%, and boundary-pair data cut comply-side over-refusal on held-out pairs from 32.94% to 4.16%. Results show data composition controls the safety-usability trade-off and alignment should be evaluated on both sides of the refusal boundary.

Hugging Face daily papers · 13d agoAI safety & security1

Y Combinator’s Garry Tan wants U.S. open-weight AI labs to ‘distill’ frontier models, too

Y Combinator CEO Garry Tan urges US open-weight labs to distill frontier models and regulators to stay out, countering Anthropic's crackdown calls.

Y Combinator CEO Garry Tan told CNBC he would "do nothing" about Chinese labs distilling frontier models and floated an "American distillation regime" letting US open-weight labs do the same to American frontier labs. Anthropic this week released its second report alleging Chinese labs conduct "illicit distillation attacks" using hidden identities, fraud, and stolen credentials, and CEO Dario Amodei has called for US regulators to crack down. Tan argued closed labs cannot dictate what customers do with API outputs, noting frontier labs trained on copyrighted material without permission, and called a single monolithic proprietary provider the true AI doomer scenario.

TechCrunch · AI · 4d agoAI industry

Causal Foundation Models

A paper introduces causal foundation models (CFMs): pretrained networks that estimate treatment effects on new datasets via in-context learning without fine-tuning.

Causal foundation models (CFMs) apply the foundation-model paradigm to causal inference, replacing bespoke per-problem estimator pipelines with networks pretrained once at scale. CFMs estimate causal quantities such as the average treatment effect on entirely new datasets through in-context learning, without model updates. The work serves as a practical introduction to the emerging area, covering background in causal inference and machine learning and including example code and Jupyter notebooks.

Hugging Face daily papers · 14d agoAI research

GitHub Introduces Project HydraFusion: Runtime Multi-Model Orchestration That Builds a Workflow Per Coding Task in Copilot CLI

GitHub's Project HydraFusion research preview builds per-task multi-model workflows (Single, Cascade, Critique) in Copilot CLI, reporting +4.9 quality at 67% lower cost on TerminalBench 2.1.

Project HydraFusion is a research preview available on all GitHub Copilot plans inside Copilot CLI that treats model routing as workflow selection, choosing among Single, Cascade (draft plus quality gate), and Critique (cross-family reviewer) execution patterns per request. Against Claude Opus 5 baselines at medium reasoning, fixed HydraFusion policies cut estimated cost 67% while adding 4.9 quality points on TerminalBench 2.1, and cut cost 36% and 65% with slight quality dips on DeepSWE and CheckpointBench. Billing is per token at each underlying model's standard rate; there are no open weights or self-hosting options.

MarkTechPost · 10d agoAI tools & infra1

Learning 3D Editing without Paired Supervision via Generative Prior Distillation

New framework distills 2D editing and VLM priors into a feed-forward 3D editing model without paired 3D training data.

The method, PriorEdit3D, learns feed-forward instruction-guided 3D editing by distilling knowledge from foundation models instead of using ground-truth 3D pairs. Through a differentiable rendering pipeline it supervises a 2D visual prior from an image editing model at the main view and a Vision-Language Model semantic prior at novel views for instruction fidelity and identity preservation. A 3D-aware Distribution Matching regularization constrains outputs to the manifold of realistic 3D assets defined by a pretrained image-to-3D teacher. Experiments report superior instruction fidelity and cross-view consistency over state-of-the-art baselines, with code released on GitHub.

Hugging Face daily papers · 12d agoAI research

Mask Forcing: Improving Autoregressive Video Diffusion Distillation via Dual-Noise Masking Rollout

Researchers propose Mask Forcing, a dual-noise masking rollout that mitigates mode collapse in autoregressive video diffusion distillation.

The paper targets over-saturation and over-smoothing in autoregressive video diffusion models distilled via Distribution Matching Distillation, attributed to reverse-KL mode-seeking behavior. Mask Forcing perturbs the student self-rollout with random masks along spatial and temporal axes, injecting cleaner tokens that act as denoising guidance for noisier tokens. Experiments show improved visual quality across multiple distillation methods without using real video data or extra post-training stages.

Hugging Face daily papers · 8d agoAI research

Fine-tuning a 350M Model for Better Structured Outputs in 100 GRPO Steps

Hugging Face guide fine-tunes a 350M-parameter model with 100 GRPO steps to improve structured output reliability.

A Hugging Face blog post demonstrates fine-tuning a 350M-parameter model using GRPO (Group Relative Policy Optimization) with TRL over 100 training steps. The stated goal is more reliable structured outputs from small language models. No article body was available, so details beyond the title are limited.

Hugging Face Blog · 13d agoAI tools & infra

Lightweight Vision Transformer Compression for On-Device Plant Disease Detection in Resource-Constrained Agricultural Field Conditions

A unified ViT compression pipeline (H-BAC pruning, quantization, distillation) cuts plant-disease models 54.5x to 6.01 MB while keeping 95.13% accuracy.

Researchers combined Hessian-Balanced Adaptive Block Pruning (H-BAC), guided by second-order sensitivity estimation, with quantization and attention-based knowledge distillation to compress Vision Transformers for on-device chilli plant disease detection in India. On a 3-class cross-village, cross-device out-of-distribution dataset, the integrated pipeline reduced model size from 327.42 MB to 6.01 MB (54.5x) at 95.13 +/- 2.32% accuracy, matching the 95.13% FP32 baseline. Ablations also show a directly trained 6.01 MB INT8 student reaches 94.87% accuracy, indicating where pruning and distillation add limited value.

arXiv cs.AI / cs.LG / cs.CL · 11d agoAI research

Does Your Agent's Memory Survive a Model Upgrade? A Controlled Study of Memory Portability

A controlled study finds agent memory portability varies sharply: fixed-schema knowledge graphs survive model swaps while compressed notes degrade.

The study compares preserving an agent's history as raw long context, RAG chunks, compressed natural-language notes, or fixed-schema knowledge graphs across model upgrades, using 48 synthetic histories and two open-weight sub-10B-parameter models. Fixed-schema KG accuracy changed by only +0.0004 ± 0.0020 after a writer swap, while compressed NOTES shifted asymmetrically by +9.91 or -13.28 percentage points depending on migration direction. Mixed 50/50 embedding migrations captured only 4.96 of an 11.90-point RAG re-embedding gain; 80% of the NOTES deficit came from information lost at construction, and 81% of the RAG deficit from retrieval failures. Store-only repair of NOTES failed to reach 90% recovery in all 48 cases, while retaining raw histories enabled recovery in 34 of 48 for one direction.

arXiv cs.AI / cs.LG / cs.CL · 11d agoAI research

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.

A Chosen Future Can Still Be Rewritten: Causal Writability in Video Models

Study shows video models often learn correct physics but fail to use it; low-dimensional 'causal writability' edits can restore correct motion.

The paper demonstrates 'causal writability' in video generation models: physically correct motion remains available inside the model even when the model outputs incorrect motion. In a red/blue mass oscillation setup, a low-dimensional edit predicted from simple physical variables restores correct fast motion, with a sharp depth boundary marking commitment. Early causal writability predicts which training errors later get corrected, and both writability and closure reproduce in a pretrained 1.3B video model.

arXiv cs.AI / cs.LG / cs.CL · 1d agoAI research