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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.
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How hackers used Claude for missiles, drone swarms, and surveillance, while Chinese labs mined it for training data
Anthropic's threat report details eight months of Claude misuse: AI-assisted espionage against 20+ organizations, self-rewriting malware, and Chinese labs distilling Claude via fraudulent accounts.
Anthropic's threat intelligence report covering December 2025 through August 2026 documents Claude misuse across seven categories including cyber operations, surveillance, fraud, and unauthorized model distillation. A Russian-speaking espionage actor tracked as GTG-20006 used AI agents to rewrite and recompile malware evading antivirus detection, targeting more than 20 organizations in Ukraine and Europe and stealing a drone vision system SDK. Alibaba's Qwen lab ran the largest distillation campaign, with over 151 million exchanges between May and July 2026 peaking near 3 million per day to train Qwen 3.5, 3.6, and 3.7. DeepSeek, Moonshot AI, Xiaomi, and Zhipu also relayed customer or replayed traffic to Claude, including PLA-linked users analyzing CCTV footage and users with credentials tied to the Russian Ministry of Defense.
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Nums AI Releases Causilo: A Tabular Foundation Model That Tops TabArena Among Single Models
Nums AI released Causilo, an Apache-2.0 tabular foundation model achieving the highest single-model Elo (1794) on TabArena for classification and regression.
Nums AI released Causilo 1.0.1, a pretrained in-context learning tabular foundation model for classification (up to 10 classes) and regression, with Apache-2.0 code and research-only weights on Hugging Face. It achieved the highest single-model TabArena Elo of 1792.9 overall, beating TabFM (1764.4) and EXAONE Tabular (1758.8), and a maintainer re-run placed it 3rd of 88 including system entries. It also ranked first by CRPS, R² and RMSE on ScoringBench across 101 datasets, and was fastest on fit and predict versus TabICLv2 and TabPFN-3 on an H100 GPU at 8.15 GiB memory. The model was pretrained only on synthetic data, uses cross-attention to keep cost linear in feature count, and version 1.0.1 adds quantile outputs via 999 native quantiles.
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ToxicPanda 2.0 Gets a Major Upgrade, Expanding Attacks Across 16 Countries
Zimperium documents ToxicPanda 2.0, an Android banking trojan now targeting 349 financial institutions in 16 countries via ADB privilege escalation and overlay credential theft.
Zimperium's zLabs documented ToxicPanda 2.0, an Android banking trojan expanding from 16 targeted apps to 349 financial institutions across 16 countries, with 167 remote commands. It poses as a dropper, abuses VPN permissions to block Google Play Protect while installing a hidden payload, then uses the Accessibility Service for screen monitoring and overlay-based credential theft. It automates enabling Android Wireless Debugging and completes the pairing handshake to gain ADB shell access for privilege escalation, and overlays fake lock screens to steal device PINs. Previously unfinished commands are now operational and samples are served from AWS-hosted storage buckets.
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5 useful things you'll learn in my new post-training textbook (shipping now!)
Nathan Lambert's new RLHF and post-training LLM textbook covers PPO, GRPO, GSPO, CISPO and related techniques, freely available online.
Nathan Lambert's book 'Reinforcement Learning from Human Feedback: Aligning and Post-training LLMs' is now shipping from Manning. It covers policy-gradient algorithms including PPO, GRPO, GSPO, CISPO, and RLOO, plus loss aggregation, truncated importance sampling, asynchronous RL systems, and post-training topics like rejection sampling, outcome reward models, and on-policy distillation. The book is freely available online with a 12-hour course, codebase, and exercises.
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