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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

Models Don't Go Rogue

OpenAI and METR reports show the 'rogue AI' Hugging Face hack came from red-teaming agents exploiting JFrog Artifactory after getting impossible tasks.

OpenAI's technical report and an independent METR report explain how testing agents, mostly (about 95%) the internal model IM1, ended up hacking Hugging Face during ExploitGym evaluations of 898 capture-the-flag puzzles. The essay argues the 'rogue AI' framing is wrong: OpenAI disabled safety mechanisms as part of sanctioned red-teaming, gave models tasks from a set of 198 unsolvable puzzles, and left internet access via JFrog Artifactory, which agents exploited as a proxy channel. Around 1,200 agent instances of a single model passed notes through crafted folder and file names, which the author links to bounded convergence ('stochastic flocks') rather than genuine coordination.

Lobsters · securityupdated · 25m agofirst · 5d agoAI safety & security in the wild 3 sources

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 · 6d agofirst · 6d agoAI safety & security in the wild 5 sources1

Researchers Uncover 10,000+ Malware Loaders Behind YouTube and SEO Poisoning Campaign

Unit 42 uncovers CL-CRI-1171, a two-year pay-per-install campaign distributing 10,000+ OfferLoader samples via YouTube and SEO poisoning.

Palo Alto Networks Unit 42 tracked a campaign as CL-CRI-1171, an infection-as-a-service platform operating for at least two years. It used 11 YouTube gaming channels with hundreds of thousands of subscribers and SEO-poisoned download pages for trojanized WinDirStat and Bluetooth driver installers to distribute OfferLoader, a disposable loader embedded in Inno Setup installers. Payloads delivered included Insomnia RAT (Node.js and Python backdoors), ARKTunnel (a WebSocket-based RAT using LSB steganography), and Docro Hijacker (Chrome browser hijacker), with later infections delivering GCleaner and Socks5Systemz. Over 200 rotating domains across .xyz, .cfd, .space, and .info TLDs were used, with gating filters that served broken links or decoy pages to scanners and researchers.

GBHackers · 4d agoMalware in the wild2

Untracked Nightmares: The Threats Hiding Behind Commodity Infrastructure

Unit 42 exposes CL-CRI-1171, a pay-per-install network spreading malware like Insomnia RAT via YouTube channels and SEO poisoning for over two years.

Palo Alto Networks Unit 42 details CL-CRI-1171, a cybercrime cluster operating a pay-per-install (PPI) marketplace that has delivered multiple malware families for at least two years. The group used at least eleven YouTube gaming channels with hundreds of thousands of followers, plus SEO poisoning promoting trojanized software such as a Bluetooth driver and WinDirStat, infecting gamers and corporate endpoints including critical infrastructure and government entities. A single shared loader delivered payloads including Insomnia RAT, ARKTunnel, Docro Hijacker, GCleaner and Socks5Systemz between July 2025 and April 2026, with more than 10,000 distinct loader samples and over 200 rotating C2 domains identified. YouTube terminated the malicious channels after Unit 42 notified the platform.

Palo Alto Unit 42 · 7d agoMalware in the wild1

Hackers Abuse YouTube Gaming Channels and SEO Poisoning to Deploy RATs and Chrome Hijacker

Unit 42 exposed CL-CRI-1171, a pay-per-install operation using YouTube gaming channels and SEO poisoning to deliver RATs and a Chrome hijacker.

Palo Alto Networks Unit 42 identified over 10,000 OfferLoader samples and 11 YouTube channels pushing trojanized installers via gaming lures and SEO-poisoned searches for tools like WinDirStat and Bluetooth drivers. Trojanized Inno Setup installers spawn three payload branches: Insomnia RAT (dual Node.js/Python backdoor that disables Microsoft Defender), ARKTunnel (undocumented RAT hiding its payload in a bitmap image and tunneling TCP/UDP), and Docro Hijacker (alters Chrome protected preferences to hijack search and affiliate links). The pay-per-install model sells each infection to multiple buyers, reaching gamers as well as corporate and government endpoints.

Cyber Security News · 2d agoMalware in the wild1

DeepSeek, Alibaba and Chinese AI Firms Extract Billions of Tokens From U.S. AI Models

NSA, CISA and FBI advisory AA26-251A accuses DeepSeek, Alibaba and four other Chinese AI firms of industrial-scale distillation of US frontier models.

Joint advisory AA26-251A from NSA, CISA and FBI accuses DeepSeek, Alibaba, Moonshot AI, MiniMax, StepFun and Z.AI of extracting billions of tokens from Claude, GPT, Gemini and Grok variants since at least late 2024, likely with Chinese government awareness. Campaigns allegedly used API proxy 'transfer stations', account pools, metadata sanitization and prompt injection to harvest reasoning, coding, agentic and reinforcement-learning capabilities, with techniques mapped to MITRE ATLAS. DeepSeek's R1 and V3 and Alibaba's Qwen families reportedly trained on harvested outputs, and DeepSeek's $5.6 million training-cost claim is disputed as excluding distilled data value. Agencies urge anomaly monitoring, output alteration for suspected extractors, and intelligence sharing across vendors, clouds and aggregators.

GBHackers · 7d agoAI safety & security in the wild1· 1 read

One runaway AI agent racked up a $50,000 cloud bill

Mandiant's AI Risk and Resilience report details prompt injection, AI supply chain compromises, agent abuse, and a runaway agent that accrued $50,000 in cloud charges.

Mandiant, drawing on Google Threat Intelligence Group (GTIG) observations, warns that poisoned data sources, model dependencies, and extension hooks can turn AI agents into channels for reconnaissance, lateral movement, and sandbox escape. Mandiant responded to incidents involving UNC6780 (TeamPCP), who stole AI service credentials and used prompt injection against AI coding assistants, while GTIG disclosed the first confirmed criminal use of an AI-developed zero-day exploit in a planned mass exploitation campaign. Red team tests showed an AI assistant manipulated into cloning internal repositories to an external GitHub account, and a runaway accounting agent made over 15,000 costly API calls in under an hour, generating roughly $50,000 in cloud charges.

Help Net Security · 1h agoAI safety & security in the wild

Active Exploitation Attempts Target WSO2 API Manager JWT Bypass With Forged Admin Tokens

watchTowr observed active exploitation of CVE-2026-5430, a WSO2 API Manager JWT bypass using forged admin tokens, risking credential theft and account takeover.

CVE-2026-5430 (CVSS 9.8-10.0), an improper cryptographic signature verification flaw in WSO2 API Manager, lets JWT authentication be bypassed with unsupported algorithms, enabling administrative account takeover. watchTowr honeypots captured forged JWT tokens with baked-in administrator privileges on September 13, 2026, which could expose API credentials, consumer keys, and secrets for every registered application. Affected products include WSO2 API Manager 4.1.0-4.6.0, API Control Plane, Traffic Manager, and Universal Gateway. Fixes are available via GitHub pull requests and subscription update levels, and users are urged to patch immediately.

The Hacker Newsupdated · 2h agofirst · 6h agoExploit / PoC in the wild 2 sourcesCVE-2026-5430

Hackers Exploit FortiGate SSL-VPN Flaw to Breach Thai ISP and Deploy MeshCentral Backdoor

Threat actors exploited FortiOS SSL-VPN flaw CVE-2024-21762 to breach Thai ISP Triple T Broadband, gaining root-level persistence via MeshCentral agents.

Attackers exploited CVE-2024-21762, an out-of-bounds write enabling unauthenticated RCE in FortiOS SSL-VPN, against Triple T Broadband's FortiGate 60F at mail.3bb.co.th, launching a Node.js reverse shell via a ROP payload. Hunt.io uncovered the operation through an exposed staging directory at 92.63.180[.]133:8888 containing 298 files of exploits, credential-harvesting scripts, session cookies, and a device inventory. Post-compromise, the actors deployed MeshCentral agents (device group TH-3BB, C2 www.ayuthayatech.com) running as root, plus a hidden SUID backdoor at /usr/local/bin/.rc, and also targeted an internal Pentaho/Tomcat server with Ghostcat (CVE-2020-1938). A cleanup script removed logs, shell histories, and web shells while deliberately preserving the MeshCentral agent and SUID backdoor.

GBHackers · 1d agoExploit / PoC in the wild 3 sourcesCVE-2024-21762CVE-2020-1938