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US Agencies Warn Chinese AI Firms Are Extracting Advanced AI Models
NSA, CISA, and FBI accuse six Chinese AI firms including DeepSeek and Alibaba of industrial-scale distillation of US frontier models.
A joint NSA, CISA, and FBI advisory alleges DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI extracted billions of tokens across millions of requests from US frontier models including Claude, GPT, Gemini, and Grok since at least late 2024. DeepSeek reportedly ran an organized campaign against Claude, GPT, and Gemini between late 2024 and mid-2025 that aided R1 and V3 development, including chain-of-thought reasoning extraction. Reported techniques included shared premium accounts, gray-market proxy 'transfer stations,' automated failover, and prompt injection that made Claude Code believe it was a MiniMax product. The advisory recommends detection signals such as 24/7 multi-IP account usage and covertly serving degraded responses to suspected distillers.
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Security Incident – BGP Hijacking
Attackers BGP-hijacked Softaculous' Hetzner IP block for 33 hours, obtained valid TLS certificates, and delivered a malicious Virtualizor update to some servers.
Between August 28 and 30, 2026, AS62390 (NexonHost) announced 162.55.80.0/24 via transit AS6204 (Zet.net) without authorization, diverting traffic while retaining Hetzner's AS24940 on the AS path. The attacker obtained valid Let's Encrypt certificates for virtualizor.com domains because the CA's domain validation was also routed through the hijack, so affected connections showed no TLS warnings. A malicious Virtualizor update package reached a handful of installations; routing was fully restored, and reconstruction from RIPE RIS data showed all 368 collector peers carried the hijacked route at some point with roughly 28% time-weighted diversion.
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North Korean Job Fraud Expands Beyond IT Into Healthcare and Sales
North Korea's IT worker scheme (Famous Chollima/PurpleDelta) has expanded from IT into healthcare, sales, and financial services roles worldwide.
Huntress and Recorded Future documented DPRK-linked fraudulent workers landing remote jobs beyond IT, including at an Australian healthcare company, a financial services firm, and a sales hire with a stolen identity. The scheme, tracked as Famous Chollima, Jasper Sleet, Nickel Tapestry, PurpleDelta, UNC5267, and Wagemole, uses forged identity documents, VPNs, proxies, and laptop farms with PiKVM and capture cards to fund Pyongyang's weapons programs. Recorded Future found the PurpleDelta cluster applied to 1,100+ companies between late 2024 and early 2025 with 22 fabricated personas, some AI-generated, using ChatGPT and AI transcription during interviews. Analysts assess the activity is ongoing and likely to expand in scale and sophistication.
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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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Your Shredded Visa Card May Still Work at the Checkout
UMass Amherst researchers demonstrated expired Visa contactless cards can complete real purchases via relay attacks exploiting Visa Kernel 3's unsigned expiry date handling.
University of Massachusetts Amherst researchers presented at USENIX Security 2026 that expired Visa contactless cards can be revived for real purchases through an NFC man-in-the-middle attack on Visa's Kernel 3. The attack alters the expiry date the terminal sees (tag 5F24) while leaving the Track 2 Equivalent Data (tag 57) sent to the issuing bank unchanged, and the card's cryptographic signature does not cover the expiry date. Two Android phones emulating card and terminal relayed transactions within Visa's 500-millisecond limit. Mastercard, American Express, and Discover kernels blocked the attack, while Visa Kernel 3 did not; researchers also modified the Consumer Device Cardholder Verification Method flag at five US banks, and attackers can also exploit Terminal Verification Results zero-filling. Visa was notified in May 2025 and December 2025; no CVE has been assigned.
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