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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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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.
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Aggah Campaign: Bit.ly, BlogSpot, and Pastebin Used for C2 in Large Scale Campaign
Aggah campaign abuses Bit.ly, BlogSpot, and Pastebin as multi-hop C2 to deliver RevengeRAT across the Middle East, US, Europe, and Asia.
Unit 42 details the Aggah campaign, which began with spearphishing emails in March 2019 spoofing a large financial institution and targeting education, media/marketing, and government organizations in the Middle East, later expanding to the US, Europe, and Asia. Delivery documents use Template Injection to load a remote OLE file whose macro runs mshta against a Bit.ly link redirecting to a BlogSpot post, which then uses Pastebin pastes to download RevengeRAT configured with a duckdns[.]org C2 domain. The embedded script also deletes Microsoft Defender signatures and kills Defender and Office processes, and modifies registry keys to enable macros. High-level TTPs resemble the Gorgon Group, but Unit 42 could not confirm attribution.
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