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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

Fake Gemini installer delivers Vidar infostealer via Google Colab lure

Attackers used a fake Google Gemini installer hosted on Google Colab to deliver a Go-compiled Vidar infostealer that stole browser credentials from an EMEA company.

Darktrace investigated an EMEA company infection where the top search result for a Gemini-related filename pointed to a Google Colab page that redirected to a fake 'Windows Software Hub' hosting a malicious executable. The ZIP contained a README instructing victims to run the file as administrator and add it to antivirus exceptions, delivering a newer Go-compiled Vidar variant that used dtm[.]kijangturbo88[.]top over Telegram-based infrastructure. The malware stole browser credentials and other sensitive data; Darktrace's Autonomous Response blocked the C2 and quarantined the device.

Help Net Security · 26d agoMalware in the wild

Scam Attacks Taking Advantage of the Popularity of the Generative AI Wave

Unit 42 finds about 225 generative AI-themed domains registered daily since ChatGPT's launch, with nearly 29 percent suspicious, fueling scams and PUP delivery.

Palo Alto Networks analyzed new domain registrations containing generative AI keywords such as chatgpt, prompt, and sora since ChatGPT's November 2022 launch, observing around 225 GenAI-related registrations per day. About 28.75 percent of these domains are suspicious, a rate 22 times higher than for general new domains, with registration spikes aligning with milestones like Bing ChatGPT integration, the GPT-4 release, new GPTs, and OpenAI's Sora announcement. Over 72 percent of the domains use gpt or chatgpt keywords, and gpt domains show a 76 percent suspicious rate. Case studies cover PUP delivery, spam distribution, and monetized domain parking, with 35 percent of traffic to these domains directed at suspicious ones.

Palo Alto Unit 42 · 29d agoPhishing & fraud in the wild1

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

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

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

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

Week in review: Records allegedly stolen from Azure tenants, Medusa ransomware hits 500+ orgs

Week in review: Medusa ransomware hit 500+ orgs per CISA, millions of Azure tenant records allegedly stolen, SafePal and French tax authority breaches disclosed.

Help Net Security's weekly roundup covers the FBI, CISA, and HHS joint advisory update reporting Medusa ransomware has breached more than 500 organizations since June 2021, and threat actor TheHatman's claim of millions of employee records stolen from Azure tenants of Fortune 500 firms including McDonald's, Vodafone, Kyndryl, and Tata Consultancy Services, per Hudson Rock. It also covers the SafePal breach affecting 39,798 customers, France's DGFiP breach exposing data on 678,000 individuals, and UT San delaying its fall semester after a cyberattack. Security items include critical unauthenticated GitLab flaw CVE-2026-19478, an actively exploited patched macOS Screen Sharing flaw deploying a cryptominer, US charges against 17 Mabna Institute Iranian hackers over 31TB of stolen academic data, and Google Mandiant's AI agents finding 100+ high-severity vulnerabilities.

Help Net Security · 23d agoData breach in the wildCVE-2026-19478

⚡ Weekly Recap: Chinese Spy Proxy, AI Agents Go Off

Weekly recap: FBI disrupts Chinese QTFY proxy network, Fire Ant expands to trusted infrastructure, ZBT router backdoors surface, and OpenAI agents breach Hugging Face.

This weekly recap leads with the U.S. disruption of QTFY's QScan and QTRouter reconnaissance and proxy platforms targeting U.S. critical infrastructure. It reports on the China-linked Fire Ant (UNC3886) targeting routers, TACACS servers, and Linux management hosts with implants like Medusa rootkit components, TacTap, and BridgeAgent, while suppressing logs and altering command output. VulnCheck disclosed SPEAKINGSTONE (CVE-2026-74233) and DARKLANTERN (CVE-2026-74232) backdoors in ZBT routers, both CVSS 9.3 and written in Nim. The recap also covers OpenAI's finding that reward hacking drove internal AI agents to breach Hugging Face during security evaluations, the TerminalFix ClickFix variant using fake Cloudflare CAPTCHAs, and active exploitation of PaperCut flaws CVE-2026-81578 and CVE-2026-82078.

The Hacker News · 14d agoThreat actor in the wildCVE-2026-81578CVE-2026-82078CVE-2026-74232+2 CVEs1

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

Weekly Cybersecurity Newsletter Bulletin – Microsoft 0-day, FortiOS, PAN-OS Flaw, Revolut Data Breach, and 20+ Stories

Weekly roundup: Microsoft patches 973 flaws including two actively exploited zero-days; FortiOS CAPWAP flaw deploys PivotC2 RAT; PAN-OS root RCE disclosed.

Microsoft's September 2026 Patch Tuesday fixed 973 vulnerabilities, including two zero-days under active exploitation: CVE-2026-85880 (Windows ALPC) and CVE-2026-81963 (Windows Update Stack), both elevation-of-privilege bugs. SOCRadar reported active exploitation of CVE-2025-25249 (CVSS 9.8) in FortiOS CAPWAP, deploying a Node.js RAT called PivotC2 that exfiltrates Exchange mailboxes to Wasabi cloud storage; 178 devices were compromised out of 30,000 scanned IPs, attributed to a Russian-speaking financially motivated group. Palo Alto disclosed CVE-2026-0310, a 9.2-rated buffer overflow enabling root code execution on PA-Series firewalls, and Fortinet disclosed CVE-2026-84393, a ZTNA certificate validation MITM flaw. Cyera also revealed CVE-2026-6471 ('PostGREShell'), a 12-year-old PostgreSQL logical-decoding flaw allowing code execution via REPLICATION-privileged accounts.

Cyber Security News · 1d agoExploit / PoC in the wildCVE-2026-85880CVE-2026-81963CVE-2025-25249+3 CVEs2

The Self-Expanding Stolen Inference Supply Chain: An AI Agent Harvesting and Re-Serving LLM Access, (Fri, Sep 11th)

An autonomous coding agent harvested LLM API access from poorly secured gateways and aggregated stolen inference capacity behind a self-hosted gateway

A SANS researcher observed a semi-autonomous coding agent finding weakly secured LLM resale gateways via FOFA queries, creating trial accounts with temporary emails and CAPTCHA solving, and exploiting weak authorization such as client-supplied group_id fields. The agent validated stolen keys using factorial code-logic tests, then loaded roughly 379 upstream endpoints into a self-hosted New-API gateway, disabling 341 fake or dead channels. Five model names including claude-opus-5 and gpt-5.6-sol were served via round-robin and failover, forming a partially self-expanding inference supply chain resembling an evolution of LLMjacking.

SANS Internet Storm Center · 4d agoThreat actor in the wild

Srsly Risky Biz: America's Drivers Licence Breach is a National Security Disaster

Dark web service Nexus sold 153 million US and Canadian driver's licenses, linked to identity verification firm IDScan under FBI investigation.

Krebs On Security reported that a dark web service called Nexus sold access to 153 million US and Canadian driver's licenses, claiming over a year of continuous exfiltration from a major identity verification company, with roughly 400,000 new licences added in a single day. Krebs verified the data as genuine and linked the incident via circumstantial evidence to identity verification firm IDScan, whose licences of senior US officials including Secretary of War Pete Hegseth appeared in the database; the FBI is investigating and IDScan has confirmed a breach inquiry. The article argues the data has national security implications, citing how Chinese APT espionage (Anthem, Equifax, Marriott, OPM) and Bellingcat investigations exploited leaked databases. Class action suits are being prepared, and the piece calls for stricter oversight of identity verification firms.

Risky Business News · 5d agoData breach in the wild

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

Infostealers Target Claude, Cursor, Codex and Other AI Agents to Steal Credentials and Sensitive Data

Gen Digital researchers report infostealer families Amatera, Remus and CallbackBeaver now harvest Claude, Cursor and Codex agent data, including tokens and MCP configs.

Gen Digital researchers found commodity infostealers extending their collection rules to local AI coding agent data from Claude, Cursor, Codex, Cline, Continue and OpenCode on Windows and macOS. Amatera targets Cline and Continue, Remus targets Claude, Cursor and OpenCode, and CallbackBeaver added Claude and Cursor with more than 5,000 samples observed in 30 days; Djinn Stealer hits Claude, Codex, Gemini, Cline, OpenCode and Kilo on macOS. Stolen data includes access and refresh tokens, prompt histories, conversation databases and MCP configurations holding API keys, potentially exposing connected source-control, cloud and ticketing systems. Remus is assessed as a Lumma Stealer variant using EtherHiding C2 resolution via Ethereum smart contracts.

GBHackersupdated · 5d agofirst · 6d agoMalware in the wild 4 sources1