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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 · 7d agoAdvisory in the wild1

US Agencies Warn China Is Systematically Extracting Frontier AI Capabilities

NSA, CISA and FBI warn Chinese AI firms including DeepSeek and Moonshot systematically extracted billions of tokens from US frontier models since late 2024.

The NSA, CISA, and FBI report that China-based AI companies including DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI extracted billions of tokens from US frontier models such as Claude, GPT-4/GPT-5, Gemini, and Grok 4 since late 2024. The distillation trained DeepSeek's R1 and V3 and Moonshot's Kimi-K2/K3 models, and the agencies mapped the tactics to MITRE ATLAS while noting additional novel techniques like subscription exploitation and request metadata sanitization. They describe the activity as a strategic economic threat to US technological leadership and recommend behavioral detection, differential privacy, and targeted cost-imposing responses.

SecurityWeekupdated · 4d agofirst · 6d agoAI safety & security in the wild 13 sources1

Threat actors are coming for your AI assets to operationalize their use of AI

Google GTIG reports espionage and crime groups stealing AI models, prompts, and API credentials, plus distillation campaigns and agentic AI attack automation.

Google Threat Intelligence Group's quarterly AI Threat Tracker reports adversaries stealing proprietary models, source code, prompts, and API credentials from government, healthcare, and media targets, including China-based UNC6508 compromising clouds to run unauthorized LLM workloads. Distillation campaigns against Google's models exceeded 100 million prompts launched via thousands of stolen account credentials through proxy networks. Mandiant also observed a financially motivated actor deploy an autonomous multi-agent framework that harvested thousands of third-party credentials in under 6 hours, and a 'Recon' framework on a live C2 server managing over 23,000 stolen credentials including cloud and AI API keys.

CSO Online · 14h agoThreat actor in the wild

AI lets small actors run state-level hacking campaigns, Anthropic report finds

Anthropic's threat report finds AI let a Russian-aligned espionage campaign, a Chinese student-run exploit foundry and ShinyHunters operators run state-grade operations.

Anthropic's report covering December 2025 to August 2026 details a Russian-aligned espionage campaign by actor 'JackPoterz' — matching Midnight Blizzard behaviors — against more than 20 government and defense organizations across Ukraine and Europe, with AI agents autonomously rebuilding Windows implants to evade detections. Chinese undergraduates ran an automated vulnerability-research foundry using Claude agent swarms, yielding more than a dozen potential zero-days in one month. ShinyHunters-affiliated operators used AI to dump over 2,100 Azure access tokens across 40 corporate tenants in 34 hours. Seven Chinese labs including Alibaba, DeepSeek, Moonshot AI, Xiaomi and Zhipu distilled Claude outputs; Alibaba peaked at nearly 3 million exchanges per day from more than 3,500 fraudulent accounts to train its Qwen systems.

CyberScoop · 5d agoThreat actor in the wild2· 1 read

GTIG AI Threat Tracker: From Prompting to Autonomy – The Evolution of Adversarial AI

GTIG's Q2 2026 tracker shows adversaries adopting agentic AI workflows, including credential harvesting in under six hours and supply chain attacks by UNC6780.

Google Threat Intelligence Group's Q2 2026 report documents adversaries moving from basic prompting to agentic AI workflows and automation, including a cloud compromise followed by agent-enabled mass credential harvesting executed in under six hours. It tracks financially motivated actor UNC6780 (TeamPCP) conducting large-scale open source supply chain compromises across PyPI, npm, and Docker Hub since March 2026, deploying credential stealers. The report also highlights growing targeting of proprietary AI models, source code, prompts, and API credentials, plus LLMJacking practices where adversaries steal developer credentials or hijack cloud infrastructure to run unauthorized AI workloads.

Google Threat Intelligence · 7d agoThreat actor in the wild

AI Is Giving Lesser-Resourced Attackers Nation-State-Level Reach, Google Warns

Google's Threat Intelligence Group warns AI now gives lesser-resourced criminal and nation-state attackers nation-state-level speed and scale, citing TeamPCP, Basin Castle, APT42, and APT24 usage.

GTIG documented throughout 2026 that adversaries increasingly use AI to automate and scale attacks. TeamPCP (UNC6780) used an AI coding chatbot with agent instructions to plan and execute a mass credential harvesting campaign in under six hours, and has compromised PyPI, npm, and Docker Hub since March 2026 with its Dustmaker credential stealer plus released tools Shai-Hulud and Miasma. PRC-nexus Basin Castle uses LLMs for target profiling, lure drafting, and malware development; APT42 (Calanque Ion) uses Gemini for OSINT and localized lures; APT24 (Ravine Castle) uses Gemini across the full attack lifecycle; and DPRK's Midnight Neptune (UNC1069) integrates AI into cryptocurrency theft. Google responds by disrupting attacker accounts and hardening models against distillation attacks.

SecurityWeek · 6d agoThreat actor in the wild 2 sources2

Security Affairs newsletter Round 594 by Pierluigi Paganini – INTERNATIONAL EDITION

Weekly Security Affairs newsletter aggregates top stories including Cisco FMC exploitation, Qilin ransomware, Chrome zero-days, and Berlin leak.

Pierluigi Paganini's Security Affairs newsletter Round 594 (International Edition) rounds up the week's security headlines. Topics include attackers exploiting a critical Cisco FMC flaw to deploy Qilin ransomware, SonicWall mass exploitation linked to a UK council attack, multiple CISA KEV additions, Chrome zero-days used by four nation-state actors, a $320 million Liquid Network theft, and a Berlin ransomware data leak. It also covers AI security items such as agent sandbox failures and distillation campaigns by Chinese AI firms.

Security Affairs · 2d agoIndustry in the wildCVE-2026-42016CVE-2026-42018CVE-2026-82329+1 CVEs1

Week in review: Linux rootkit deployed on F5 BIG-IP APM devices, Cisco FMC bugs exploited

Weekly roundup: Cisco FMC and N-able N-central zero-days exploited in the wild, MikroTik RouterOS hijacks, Microsoft Patch Tuesday ships two exploited zero-days.

State-sponsored and financially-motivated attackers are actively exploiting CVE-2026-20079, a critical authentication bypass in Cisco Secure Firewall Management Center (FMC), alongside CVE-2026-20316. N-able issued an emergency hotfix for CVE-2026-86218, a critical pre-auth RCE in the N-central RMM platform exploited in the wild. CERT Polska disclosed six RouterOS vulnerabilities being chained to hijack internet-exposed MikroTik devices. Microsoft's September 2026 Patch Tuesday shipped a record patch count including two zero-days, while roughly 67,000 Trezor customers faced phishing after a shipping-partner breach and researchers privately disclosed a zero-click WeChat worm to Tencent.

Help Net Security · 2d agoExploit / PoC in the wildCVE-2026-20079CVE-2026-20316CVE-2026-862182· 1 read

Anthropic caught Russia-linked spies using Claude in hacking operations

Anthropic disrupted Russia-linked APT29 using Claude in espionage against 20+ organizations, including Ukrainian government targets and a military drone maker whose vision SDK was stolen.

Anthropic's threat report covering December 2025 to August 2026 attributes the campaign to Midnight Blizzard (APT29/Cozy Bear, Storm-2945), which it links to Russia's SVR. The group compromised hotel Wi-Fi providers, altered DNS records to redirect travelers, accessed mailboxes at two drone-component manufacturers, and stole a proprietary SDK for a drone vision system, which it reverse-engineered using Claude. The group also used Claude to monitor whether security products detected its implants and to modify and redeploy flagged artifacts. The report also covers ShinyHunters affiliates using AI for credential scanning and extortion, a Chinese-speaking group's autonomous zero-day research, and a French-speaking hacktivist.

The Recordupdated · 3d agofirst · 4d agoThreat actor in the wild 11 sources

Chinese espionage groups swarm to exploit triple-link chain of zero-days

At least four China-aligned espionage groups chained three zero-days in Chromium browsers and Windows ALPC for espionage since late August.

Proofpoint observed at least four state-aligned threat groups, starting with TA412/Violet Typhoon/APT31 on August 28, chaining three zero-days in the 'BlueMoon' exploit chain targeting Chrome, Chromium-based browsers and Microsoft Windows. The chain includes RCE flaws in Chromium's JavaScript engine (CVE-2026-85046, CVE-2026-87491) and a Windows Advanced Local Procedure Call privilege-escalation zero-day (CVE-2026-85880), enabling sandbox code execution, sandbox escape and system privileges. APT31 delivered the chain via phishing links to NGOs, mining and commodity trading firms in the US, installing a browser extension disguised as Google Gemini to surveil activity and steal credentials. Other groups (UNK_LateNight, UNK_DoubleCheck, UNK_QuietRacket) targeted US aerospace, Vietnamese manufacturing, and Indonesian and Singaporean organizations; fewer than 20 victims were directly observed but the true count is likely higher.

CyberScoopupdated · 12h agofirst · 6d agoExploit / PoC in the wild 20 sourcesCVE-2026-85046CVE-2026-87491CVE-2026-858802· 1 read

Autonomous AI Agents Compromise Thousands of Credentials in Under Six Hours

Google's GTIG reports threat actors using autonomous AI agents, credential stealers, and LLMs to steal AI models, API credentials, and harvest thousands of credentials.

Google Threat Intelligence Group says attackers are targeting proprietary AI models across healthcare, government, and media, exfiltrating API credentials, and co-opting victim cloud environments to run unauthorized AI workloads. TeamPCP (Altered Spider/UNC6780) is conducting supply chain compromises of PyPI, npm, and Docker Hub, deploying the SANDCLOCK and DUSTMAKER credential stealers, with DUSTMAKER using AI workspace poisoning and prompt injection for defense evasion. One financially motivated actor used an autonomous multi-agent framework to compromise thousands of third-party credentials in under six hours without human intervention. China-nexus groups UNC6508 and Basin Castle (Mustang Panda) used local open-weight LLMs and commercial LLMs like Gemini, Claude, and Codex for espionage tasks and evading provider monitoring.

The Hacker News · 7d agoThreat actor in the wild 2 sources1

McKesson copes with fallout from data theft extortion attack

McKesson discloses a data theft extortion attack by ShinyHunters affecting oncology and medical-surgical customers, with a reported $55 million demand.

McKesson disclosed that attackers gained access to some of its third-party applications and stole data associated with a subset of customers in its oncology, multispecialty, and medical-surgical business units; the intrusion ran for four days from August 21 and was discovered August 25. ShinyHunters claimed responsibility and listed McKesson on its data-leak site, reportedly demanding more than $55 million with a September 1 deadline. Flashpoint analysts say the group typically uses social engineering and identity weaknesses with valid credentials to access cloud-hosted environments, making the intrusion hard to detect. McKesson, which distributes about one-third of pharmaceuticals used in North America with $403.4 billion in annual revenue, says operations continue and it has reasonable assurance of no ongoing unauthorized activity.

CyberScoop · 15d agoData breach in the wild

ATF confirms cyberattack hit system containing info on its investigation targets

Qilin ransomware group claimed breaching the ATF, exposing data on investigation targets; the agency says a standalone system was hit with no mission impact.

The Bureau of Alcohol, Tobacco, Firearms and Explosives confirmed a cyberattack on a standalone system holding information about targets of ATF investigations, designated a major incident, with no impact on case management, lab, or eForms systems. Qilin, a Russian-speaking affiliate-based ransomware group, claimed responsibility, though ATF declined to confirm involvement or the root cause. Qilin has claimed hundreds of victims across 60+ countries since 2022 and partners with Scattered Spider and Moonstone Sleet.

CyberScoop · 18d agoRansomware in the wild

Officials disrupt Chinese espionage operation that hit multiple federal agencies

FBI and DOJ seized QTFY infrastructure, disrupting a Chinese state-sponsored group that compromised federal agencies and critical infrastructure since 2018.

Authorities seized three domains powering QScan and QTRouter, the hacking suite of QTFY, a Chinese government-funded group operating through front company Nanjing Xinjiuwei Network Technology. Targets include the Departments of Energy, Justice, and Health and Human Services, the Federal Reserve, NASA, NIH, financial institutions, defense contractors, utilities, telecoms, and hospitals; the group exploited zero-days in Ivanti, Pulse Secure, Fortinet, Citrix, and others, intruding three DOE national labs in September 2024. QScan carried over 200 proof-of-concept exploits and processed more than two million scanning tasks in a single day in 2024.

CyberScoop · 20d agoThreat actor in the wild1

Apollo discloses data breach from ongoing wave of attacks hitting financial sector

Apollo Global Management confirmed a breach of cloud platforms by BlackFile-linked social engineering attackers, exposing personal data including Social Security numbers.

Apollo Global Management disclosed that attackers accessed some of its cloud platforms between July 6 and July 10, 2026. The company determined on August 12 that compromised data included names, dates of birth, contact information, home addresses, and Social Security numbers. Google attributed the broader campaign against financial sector organizations to BlackFile, a threat group affiliated with The Com that operates extortion brands Redact, Pink, Helix, and Falcon. Apollo, which manages $1.05 trillion in assets, is the first victim to formally confirm sensitive personal data was compromised in this wave, with Blackstone and Bain Capital also reportedly targeted.

CyberScoop · 25d agoData breach in the wild

AI-fueled attacks pose ‘active threat’ to water, other sectors, U.S. agencies warn

NSA, CISA, FBI, DOE and EPA warn hackers are using AI-generated scripts to actively attack Siemens S7 PLCs across critical-infrastructure sectors.

A joint cybersecurity advisory from the NSA, CISA, FBI, Department of Energy and EPA warns of an active threat campaign targeting water, food, energy, chemical, manufacturing and commercial facilities via Siemens S7 Series programmable logic controllers. The actors use internet scanning to find exposed or poorly protected PLCs, then deploy AI-generated exploitation scripts disguised as legitimate monitoring tools, an OT first that dramatically lowers the expertise required for ICS attacks. Siemens says no new S7 vulnerabilities are involved, only exploitation of misconfigurations, and it is coordinating with CISA's ProductCERT. The warning follows a joint FBI-EPA advisory confirming attacks at water and wastewater utilities in at least 12 states since July 27.

CyberScoop · 26d agoAdvisory in the wild1

The long tail of Clop’s PTC hack is just beginning to emerge

Clop mass-exploited CVE-2026-12569 in PTC Windchill and FlexPLM in early June, claiming data theft from dozens of large organizations.

Clop began sending extortion emails in mid-July after exploiting CVE-2026-12569 in PTC Windchill and FlexPLM, likely as a zero-day in early June before PTC's June 17 disclosure and patch. Confirmed victims include Toast and Zebra, while GE, Philips and Shell are among claimed victims. CISA added the flaw, which allows unauthenticated remote code execution, to its KEV catalog on June 25. ReliaQuest said the group used a custom Windchill-specific web shell for credential theft and large-scale exfiltration, echoing its past MOVEit and Oracle E-Business Suite mass-exploitation campaigns.

CyberScoop · 27d agoThreat actor in the wildCVE-2026-125691

Medusa ransomware tallies hundreds of new victims, says updated advisory on group’s tactics

CISA, FBI, and HHS updated their Medusa ransomware advisory, reporting over 500 victims and detailing the gang's access-broker and exploit tactics.

A joint advisory update from CISA, the FBI, and HHS expands the March 2025 Medusa guidance, drawing on a year of FBI investigations. The ransomware-as-a-service group's known victim tally grew from more than 300 to more than 500 between March 2025 and April 2026, with the Healthcare and Public Health sector frequently hit. Medusa pays access brokers $100 to $1 million, has exploited flaws such as Fortra GoAnywhere and BeyondTrust vulnerabilities, and leverages newly announced exploits within 24 hours, sometimes a week before public disclosure. The group uses living-off-the-land techniques, remote monitoring and management software, and RDP for lateral movement, and has been linked to actors including Microsoft-tracked Storm-1175 and North Korean hackers targeting healthcare.

CyberScoop · 28d agoRansomware in the wild

Details emerge on BlackFile's recent attacks on financial companies

BlackFile (UNC6671), a The Com-linked extortion crew, keeps hitting financial and med tech firms with voice-phishing IT-support scams and ~$3 million demands.

Google Threat Intelligence Group (tracking BlackFile as UNC6671, linked to The Com) reports the extortion group remains active, shifting focus to the financial sector and med tech organizations, with new Redact-brand extortion demands issued last week. The group impersonates IT support in voice-phishing attacks using hundreds of recruited callers, targets large firms in what researchers call big-game hunting, and processes an average of 1.5 new victims daily. Extortion demands start around $3 million and are typically negotiated below $1 million; Flashpoint observed infrastructure targeting Blackstone, Bain Capital, Moody's, CME, and Apollo, though compromise is unconfirmed. Mandiant has responded to more than two dozen BlackFile compromises since January, and victims face escalation tactics including swatting.

CyberScoop · 29d agoThreat actor in the wild

Bisonal Malware Used in Attacks Against Russia and South Korea

Unit 42 details a Bisonal malware variant, active since 2014, targeting Russian and South Korean defense organizations via PDF-disguised spearphishing emails.

In early May, Unit 42 discovered a campaign delivering a Bisonal malware variant against at least one Russian communications security and cryptography company and one unidentified organization in South Korea. The variant, in the wild since at least 2014, introduces a new C2 cipher and rewritten networking and persistence code, with only 14 samples collected to date. Attackers spoofed Russian state corporation Rostec in spearphishing emails carrying an executable disguised with a PDF icon; the dropper decrypts an RC4-encrypted DLL and establishes persistence via a registry Run key. Bisonal has been used since 2013 against government, military, and defense targets in South Korea, Russia, Japan, and India, alongside successors Bioazih and Dexbia.

Palo Alto Unit 42 · 29d agoMalware in the wild

Kimwolf botnet rebuilt to survive takedowns, researchers say

Palo Alto Unit 42 reports the Kimwolf/Aisuru botnet now uses HTTP/2 Chrome-impersonation floods and Ethereum blockchain-based command resolution to survive takedowns.

Palo Alto Networks' Unit 42 says a new Kimwolf/Aisuru botnet version active since February conducts DDoS floods over HTTP/2 with full Chrome browser fingerprints, making attack traffic hard to distinguish from real users. The malware resolves command servers via the Ethereum Name Service using five shuffled Ethereum endpoints, with a Tor hidden service fallback, so authorities cannot seize a domain or serve a takedown order. The botnet, powered mostly by hijacked Android TV boxes and IoT devices, previously had servers seized and an alleged operator arrested; new C2 infrastructure traces to a single network in Saint Petersburg, Russia. It is unclear whether the same developers built the new version.

CyberScoop · Aug 12, 2026Malware in the wild1