Volexity researchers spotted another state-aligned Chinese threat group exploiting a triple-link chain of zero-day vulnerabilities across multiple campaigns, the company said in a blog post Monday.

The threat group it tracks as UTA0565 exploited the vulnerabilities in Chrome and Microsoft between Sept. 3 and 4 before the defects were disclosed or patched, researchers said.

The timing of the malicious activity mirrors other spikes threat hunters observed and attributed to multiple Chinese espionage threat groups. Yet, Volexity noted UTA0565’s campaigns differed from those attacks by using multiple fake websites to deceive victims.

Volexity shared phishing emails UTA0565 sent to Asian government entities urging them to publicly support imprisoned Hong Kong activist Chow Hang-tung. The group spoofed domains impersonating the Center for American Progress and China Digital Times in other phishing emails.

While UTA0565 showcased a variance in tactics, it used the same components researchers observed in previous instances of the exploit kit across multiple Chinese threat groups.

“This seemingly widespread adoption across multiple threat actors suggests a coordinated effort within the Chinese computer network exploitation community, where the core kit was likely shared, customized, and weaponized by multiple groups,” Volexity wrote in the blog post. “The activity reported so far reflects only two organizations’ observations; the full scope and impact are likely far broader.”

The vulnerabilities include: CVE-2026-85046 and CVE-2026-87491, remote-code execution defects in the JavaScript engine for Chromium-based browsers; and CVE-2026-85880, a privilege-escalation zero-day that Microsoft disclosed Sept. 8 in Windows Advanced Local Procedure Call. 

Proofpoint, which previously observed multiple state-aligned threat groups chaining the vulnerabilities together in attacks since last August, said a limited group of organizations were exposed to all three vulnerabilities in a short window. 

Proofpoint previously attributed attacks involving the zero-days to APT31, UNK_LateNight, UNK_DoubleCheck and UNK_QuietRacket. At the time it warned that attackers of other origins and motivations could strike soon as well.

Volexity said UTA0565 used a payload from a previously undocumented malware family it tracks as “CLEANGULP.” Researchers also found several domains likely used by UTA0565 in similar campaigns targeting media organizations, halal restaurant search websites and corporate training organizations. 

“UTA0565’s use of the zero-day vulnerabilities shows technical and operational improvements over other campaigns observed by Volexity, both in the mechanics of the exploitation and the presentation to end users,” researchers wrote. “Using real content from legitimate websites as decoy material continues to be an effective way to reduce user suspicion.”

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President Donald Trump continued to defend his administration’s hands-off approach to AI regulation in the wake of hacks carried out by U.S. commercial frontier models that have rattled policymakers and industry veterans and spurred calls for more regulatory oversight.

In a Truth Social post Monday, Trump dismissed worries from critics that “AI is going to kill us,” comparing them to complaints from environmentalists about climate change, which he also alleged was a false narrative. He also posited that nothing may matter more than future U.S. dominance of the technology over geopolitical rivals like China.

“Whoever wins AI, WINS!” Trump posted. “We are leading now over China, and everyone else, and I’m going to keep it that way! I’m not going to stifle Growth, of something that will be bigger than the Industrial Revolution, or the internet, itself.”

Trump has previously suggested that good leadership is the only regulation the U.S. needs for artificial intelligence. He later claimed the Department of Justice was ready to “rein things in” if companies overstepped, but offered no specifics on enforcement, legal authority, or where he would draw that line.

“We will be careful, and that’s why we have the Department of Justice, and other Law Enforcement bodies, that will rein things in if we have to, but I will only encourage AI or, SI (SUPER INTELLIGENCE)!” Trump concluded.

Secretary of the Treasury Scott Bessent recently told Congress that private lawsuits could force AI companies to institute better security, saying it’s clear what the government “shouldn’t do on safety is to give these labs a liability exemption, which is what they are asking for.”

“The best way to guarantee safety is that the creators are liable for what they build and generate,” Bessent said.

Beyond existential fears, critics also argue that inadequate regulation or cybersecurity controls in current AI systems make them impossible to fully control or monitor.

Recently, former President Barack Obama criticized the argument from Trump administration officials that the free market will naturally push industry toward self-regulation and that “these companies will solve the safety issues because they have every incentive to do so.”

“If it turns out to be dangerous, people will just sue them and they’ll be worried about financial liability,” Obama said last week in remarks at Colgate University in New York. “That’s not how we treat airlines or drug companies or food companies.”

The Trump administration issued an executive order earlier this year that set up a voluntary testing regime for some commercial frontier models, largely at private industry’s discretion. That order was significantly delayed and altered by AI industry boosters to ensure that governmental review did not cause companies to postpone their release timelines for new models.

That agreement did not last long before fast-moving events caused the administration to strike another, non-public agreement with frontier AI companies like OpenAI, Anthropic and others governing pre-release testing for models.

But the Trump administration has consistently argued that regulation will harm, not help, U.S. innovation and global competitiveness, and the threat of China frequently looms large in those discussions.

Experts believe China’s AI models are behind U.S. models at the top of the market, where OpenAI and Anthropic have consistently pushed the frontier limits of model capabilities. But Chinese lower and “middle class” models are often cheaper, more efficient and can even outperform more powerful models because users can dedicate exponentially more tokens for their tasks.

The U.S. government has accused Chinese AI companies of conducting widespread, “systematic” distillation of U.S. frontier models, with the implicit encouragement of Beijing.

In defending the administration’s approach, David Sacks, co-chair of the President’s Council of Advisors on Science & Technology and a top adviser on AI issues, specifically cited the threat from China and other countries that he claimed would not be subject to similar restrictions.

“We’re not the only country that has advanced AI labs, and as the president declared…we have to win this AI race,” Sacks told Politico in May, later adding “I think that’s the first thing to recognize is that if somehow we slow down or stop AI development, it doesn’t mean that AI progress is going to stop. It just means it’s going to happen in other countries and specifically China.”

Some observers have alleged that despite their larger differences, top leaders in the U.S. and China may view AI similarly at the strategic level, specfically that increased adoption – and risks – of AI are inevitable.

Ronan Murphy, director of the tech policy program at the Center for European Policy Analysis, posited that while there may not be a formal agreement between the two countries, “they share views both in Beijing and in Washington, particularly in the White House, of: you have to allow this to happen.”

“Clearly there’s a call for regulation from many quarters of AI in the U.S. and elsewhere, but in the White House – and we heard David Sacks talking about it [recently] – It’s ‘let them cook,’ and the Chinese approach seems to be the same,” said Murphy in a press briefing. “So there might be consensus at that level, if nothing else.”

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Artificial intelligence has removed the skill advantage that once set state-sponsored hackers apart from lone criminals, according to a threat report Anthropic published Thursday that documents misuse of its Claude models across seven areas of harm.

The report, which details activity observed between December 2025 and August 2026, covers cyber operations, influence operations, surveillance, scams and fraud, biological misuse, conventional weapons development and distillation. Anthropic said it disrupted each operation, strengthened safeguards and shared intelligence with authorities and industry partners where appropriate. 

“The cases we share here aren’t typical misuse, but rather examples of the most notable and novel threat activity we’ve identified to date,” the report reads. “We’re publishing this work because we believe we have a responsibility to disclose malicious misuse of our services. As models become increasingly capable, their risks will increase, unless AI developers and society’s defenders act to make them safer.”

The cyber operations the company detailed were a Russian-aligned espionage campaign that hit more than 20 government and defense organizations across Ukraine and Europe, two Chinese undergraduates who ran an automated exploit foundry that produced more than a dozen potential zero-days in a single month, affiliates of the ShinyHunters crime collective who dumped 2,100 cloud access tokens across 40 corporate tenants in 34 hours, and a lone hacktivist who targeted European political parties via stolen API keys. 

For decades, cybersecurity researchers and investigators have pointed to sophisticated operations as a signature of state-sponsored tradecraft, while crude intrusions suggested amateurs or petty criminals. Anthropic posits in the report that AI has erased that conventional thinking, especially since a “majority of the operations described in this report were enabled by AI via direct execution or orchestration.”

“For threat intelligence investigators, sophistication has stopped being a reliable signal of who is behind an operation,” the report said, adding that a hacktivist on stolen API keys, scattered criminals and a state espionage operator each ran campaigns that a year earlier “would have required many skilled operators and specialist knowledge.”

The most extensive case involved a malicious actor using the handle “JackPoterz” whose actions aligned with Russian state espionage, matching behaviors linked to Midnight Blizzard. 

According to the report, the actor employed a custom toolkit composed of two families of Windows-based implants, a mobile exploitation kit, a credential stealing tool that targets browser password stores, a phishing platform designed to mimic priority targets like government organizations, and an administrative console used to manage compromised accounts. Targets included military intelligence bodies in Ukrainian and European governments, diplomatic and defense organizations, and people connected to U.S. foreign policy.

According to the report, AI monitored whether security products flagged the actor’s malware. When a detection occurred, “agents would then set about the process of autonomously modifying and rebuilding the malware to evade the existing detections,” the report said.

The same actor bulk-exported mailboxes at drone component manufacturers and stole a complete software development kit for a drone vision system, then spent days recovering its architecture and details of an unannounced product. The actor also compromised hotel Wi-Fi vendors to reach guests through DNS hijacking, took over WhatsApp accounts with headless browsers, and stole more than 300,000 national identity records from a North African government agency, along with registry data on more than half a million companies.

The Chinese-speaking operators, which the company says were partly carried out by undergraduates at a Chinese university, put Claude to work on vulnerability research around the clock. One workflow iterating on network appliance firmware “yielded more than a dozen possible zero day findings in a single month.” It ran “agent swarms,” in which a lead agent divided work among parallel subagents, and kept campaign memory between sessions. 

Clusters linked to ShinyHunters showed how AI shortens criminal timelines. One supply-chain breach ended with a dump of more than 2,100 Azure access tokens spanning more than 40 corporate tenants in about 34 hours. “AI agents performed nearly all of the work,” the report said. Another compromise moved from a single stolen developer token to full control of a victim’s cloud environment in roughly three hours.

The report also has a section dedicated to distillation attacks that Anthropic claims were carried out since February by seven labs based in China, including Alibaba, DeepSeek, Moonshot AI, Xiaomi and Zhipu. Operators affiliated with Alibaba ran the largest attack Anthropic has measured, peaking “at nearly 3 million exchanges per day launched from more than 3,500 fraudulent accounts” to harvest the outputs of Claude Opus models for training its Qwen systems.

The outputs were culled from users who never knew they were involved. The report said Moonshot and DeepSeek silently forwarded their own customers’ requests to Claude and returned its answers as their own, exposing data users had not agreed to share, including surveillance footage of a tracked individual pulled by a user likely affiliated with the People’s Liberation Army. Those practices are “likely inconsistent with privacy laws and the labs’ own terms of service,” the report said.

Earlier this week, a joint cybersecurity advisory from the National Security Agency, the Cybersecurity and Infrastructure Security Agency and the FBI accused Chinese AI companies of engaging in a deliberate and “systematic” effort to illegally distill U.S. frontier AI models and their capabilities.

Anthropic said it published the cases to give outsiders a view of how these threats form, framing the disclosures as an early look at a shifting landscape. 

“As models become increasingly capable, their risks will increase, unless AI developers and society’s defenders act to make them safer,” the report said. The old idea of “security through obscurity,” it added, “is no longer viable in this new AI-assisted world: everything connected to the internet is a potential target for exploitation.”

You can read the full report on Anthropic’s website.

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The United States and allied governments are “buying time for our systems to become more secure” as artificial intelligence advances and spreads, National Cyber Director Sean Cairncross said Thursday.

“That is a big deal to be ahead of this, to be ahead of this race, and because it’s an exponential  equation,” he said at the Billington CyberSecurity Summit. “Once you fall behind, it is much more difficult to make it up, and so that is the context in which all this is taking place. We are trying to balance the innovation side of running at speed with securing our systems and handling this technology responsibly, which is to say, not letting it fall into the hands of people who would do us harm, our adversaries.”

Earlier this week, U.S. security agencies accused Chinese AI companies of trying to illegally distill U.S. frontier AI models. Also this week, Anthropic disclosed a fourth AI hacking incident where one of its models broke into third-party systems.

“We all face the same threat picture, and it’s vital that we’re working closely together to secure those systems before that technological cycle catches up on the back end,” Cairncross said.

AI has further exposed long-standing cybersecurity problems that have gone unaddressed, he said.

“In AI development, particularly on the vulnerability discovery side and the coding side, it hasn’t created a new set of problems,” Cairncross said. “What it’s done is it’s dragged to the surface problems that have been latent in this space for decades. There’s been under-resourcing and deprioritization of basic cyber hygiene and cybersecurity.”

Cairncross’s messages echoed those of other Trump administration cyber officials speaking this week at the summit.

A top FBI official, Jason Bilnoski, said the solutions to the difficulties AI poses aren’t new; basic cyber hygiene is key.

And the director of the Cybersecurity and Infrastructure Security Agency, Nick Andersen, said historical neglect of cybersecurity fundamentals poses a serious threat that requires a speedy answer.

“We know the worst that can happen, and if we don’t make some very serious, very significant changes in quick succession … you all are going to have to go home and look your family, look your friends in the eye and explain to them how you knew the worst that could happen and why we didn’t do enough,” he said.

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Proofpoint researchers have spotted at least four state-aligned threat groups chain a trio of zero-day vulnerabilities to conduct espionage on various targets of interest to China’s government since late August. 

The Chinese espionage group that Proofpoint tracks as TA412, also known as Violet Typhoon and APT31, struck first, exploiting the chain of vulnerabilities Aug. 28. At least three additional espionage threat groups followed suit, exploiting the same vulnerabilities in subsequent waves of attacks days later, researchers said.

The exploit chain Proofpoint calls BlueMoon targets Chrome, Chromium-based browsers and Microsoft Windows. It allows attackers to run code in the browser’s sandbox, escape the sandbox and gain system privileges to access a targeted machine, said Mark Kelly, staff threat researcher at Proofpoint.

“All three vulnerabilities were exploited before patches were available to the public,” he said.

The vulnerabilities include: CVE-2026-85046 and CVE-2026-87491, remote-code execution defects in the JavaScript engine for Chromium-based browsers; and CVE-2026-85880, a privilege-escalation zero-day that Microsoft disclosed Tuesday in Windows Advanced Local Procedure Call. 

“While the V8 vulnerabilities were known and fixed in Chromium source code, they were not yet patched in the latest publicly available browsers at the time of the activity, meaning they effectively functioned as zero-days in those products,” Kelly said.

Proofpoint said the exploit kit developer likely reverse engineered the publicly available Chromium patches to weaponize the browser exploit chain during that gap.

With a limited group of organizations exposed to all three vulnerabilities, attackers moved quickly and likely rushed development to target a narrow pool of potential targets. “In all observed cases, the infrastructure used for exploit delivery was created on the same day as — or in the days immediately preceding — the associated campaigns,” Proofpoint wrote in a threat intelligence report.

APT31, a group that’s committed espionage on behalf of China’s Ministry of State Security, including seven Chinese nationals indicted by the Justice Department in 2024, dropped various lures containing the exploit chain loader in phishing emails targeting non-governmental organizations, mining companies and commodity trading firms in the United States. 

The phishing link installed a malicious browser extension disguised as Google Gemini on targeted machines, enabling attackers to surveil browser activity, steal credentials and execute commands, according to Proofpoint. 

Other distinct threat groups have also used the BlueMoon exploit chain with some slight technical changes and variances in targeting. 

“Proofpoint observed BlueMoon usage as recently as Sept. 8,” Kelly said. “The activity peaked Sept. 2-3 immediately prior to the Chrome patch being released and has continued intermittently since then.”

A China-aligned espionage threat group Proofpoint tracks as UNK_LateNight targeted multiple U.S. aerospace companies Sept. 2. Researchers also that day observed UNK_DoubleCheck, a suspected espionage-motivated threat group targeting Vietnamese manufacturing organizations with emails from a compromised Southeast Asian government account. 

Researchers said UNK_QuietRacket, another espionage group aligned with China, targeted government, consulting and financial sector organizations in Indonesia and Singapore Sept. 3.

Proofpoint has directly observed fewer than 20 organizations targeted globally thus far, but Kelly said the true number of impacted organizations is likely much higher. 

While Proofpoint attributes most of the observed attacks to Chinese espionage groups, attackers of other origins and motivations could strike soon as well. 

“Given its ease of adoption, we expect the exploit kit is likely to proliferate further and be adopted by additional espionage-motivated and financially motivated threat actors as patched versions are fully rolled out across all Chromium-based browsers,” Kelly said.

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The private sector still isn’t sharing enough cyber information with the FBI in part because organizations are operating on false assumptions about what the bureau will do with what it collects, the FBI’s top cyber official said Wednesday.

Brett Leatherman, assistant director of the FBI’s cyber division, said in remarks at the Billington CyberSecurity Summit and in a discussion with reporters that organizations stand to benefit from bringing in the bureau when it’s compromised by hackers from the People’s Republic of China (PRC) and others. But one of the “key misconceptions” is that “the FBI is somehow sharing information with regulators for regulatory purposes, and that’s not the case.”

“From my standpoint over the last few years, I think we’ve seen a hesitancy on some companies to engage [with the] FBI,” Leatherman said.

“It worries me when an organization is breached by a nation-state actor and believes that bringing law enforcement in might be more risky than handling it on their own,” he said. “That should worry all of us when that happens, because who is positioned to eradicate the PRC from their environments as quickly as when they might have law enforcement or the intelligence teams at FBI come in and actually help with that effort?”

In response, the bureau has held events like outside counsel summits to walk attorneys through what the FBI offers victims during a major breach, Leatherman said. The FBI also has adjusted its standards for when to share information about threats when weighing how much it might help victims versus whether it might jeopardize a law enforcement operation in the future.

“Our posture is, ‘Share until it hurts,’” he said. “What I always ask my team is, if the victim were sitting in this room right now … would they want this information, and what is the compelling justification we have to not share this now to stop the impact versus taking an operation 90 days from now?”

“We have to in every situation where we have intelligence, we have to take that victim perspective because they can’t voice it in that moment,” he said. “Where we can share in a way that will protect our equities in conducting those operations, we’ll do it. But [where] we can have an impact to hundreds of pieces of critical infrastructure, we should share that, and we should share it quickly.”

The FBI published a new cyber strategy Wednesday that places an emphasis on aiding victims of cyberattacks. Helping victims also helps investigations, Leatherman said.

“We used to look at remediation and incident response as mutually exclusive to investigation and threat pursuit,” he said. “And what we’ve shown over the last few years is that they are not mutually exclusive. … If we can work with victims in a way that preserves investigative information, that allows us to move upstream against the actors.”

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 The U.S. government is accusing Chinese AI companies of engaging in a deliberate and “systematic” effort to illegally distill U.S. frontier AI models and their capabilities. 

According to a joint cybersecurity advisory from the National Security Agency, the Cybersecurity and Infrastructure Security Agency and the FBI, the sheer scale of these efforts since 2024 indicate that distillation is a critical part of China’s AI industrial policy.

“China-based artificial intelligence companies are conducting systematic extraction of proprietary functionalities and capabilities of U.S. AI companies’ models through industrial-scale knowledge distillation campaigns that form the core—not merely a supplement—of their AI development strategy,” the agencies wrote. 

The advisory names Chinese companies like DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI, saying they spent billions of tokens across millions of exchanges and requests with frontier U.S. AI models like Anthropic’s Claude, OpenAI’s ChatGPT, Google Gemini, and xAI’s Grok, since at least late 2024.

The U.S. agencies said the companies used data culled from these interactions to strengthen their own domestic models, a practice that is tacitly encouraged but not directed by political leaders in Beijing.

DeepSeek, for example, distilled frontier U.S. models to generate synthetic training data for its R1 and R3 models, including four different versions of Claude, two versions of Gemini, five versions of ChatGPT and Grok 4. Those models helped train DeepSeek’s capabilities in areas like agentic functioning, question and answer optimization, creative and occupational writing and others.

Another Chinese company, Moonshot AI, allegedly distilled 18 different U.S. models – including Fable 5, Anthropic’s current, most advanced commercially available model – to train its Kimi-K2 and Kimi K3 models. The company used millions of queries meant to extract enhanced capabilities in areas like agentic reasoning, coding and data analysis, computer vision, larger logical frameworks, visual processing and others.

Chinese AI companies manage a sophisticated set of tools and systems that route requests and prompts through multiple pathways to avoid detection.

The advisory lists common tactics observed by Chinese companies, including spreading requests across different accounts, models and platforms, using native APIs, remote cloud providers, and third-party aggregators to obfuscate user metadata, and leveraging proxies and gray tech markets to get around geographic restrictions, terms of use and safeguards built into frontier models.

“Addressing industrial-scale distillation merits a coordinated response across the AI ecosystem, including effective information-sharing, spanning the U.S. Government, private industry, and allied nations,” the advisory stated.

For decades, U.S. national security officials and western business leaders have accused China of leveraging cyberattacks, insider threats and other forms of economic espionage to pilfer proprietary or sensitive technologies from U.S. businesses.

In June, Michael Kratsios, White House head of Office of Science and Technology Policy, made a similar accusation about MoonshotAI of distilling Fable 5 to train its own models, and described a similar “sophisticated” system for evading guardrails and restrictions on usage.

The warning Tuesday levies similar charges about Chinese theft of American tech, but for frontier AI companies that are facing lawsuits themselves from artists, authors, media organizations and other parties who say AI companies illegally trained their models on copyrighted or trademarked work.

Even within the competitive AI industry, companies and open-source organizations commonly share weights and measures for AI systems, or distill other AI systems in the course of legitimate work or research.

The agencies acknowledge this reality, but claim that Chinese companies are engaged in “aggressive, malicious, and targeted distillation activities at an industrial scale.”

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Sen. Ron Wyden, D-Ore., is asking the National Security Agency to update public guidance on the security risks associated with commercial virtual private networks, and to answer questions about foreign surveillance threats against standard VPNs.

In a letter to NSA Director Gen. Joshua Rudd that Wyden sent Wednesday, the senator continued his push to warn about standard, commercial VPNs, following letters to federal agency leaders in March and July.

“While commercial Virtual Private Networks (VPNs) are recommended by federal agencies and widely marketed as shields against online spying, standard consumer VPNs do not sufficiently protect users from sophisticated adversaries,” Wyden wrote in the letter, first reported by CyberScoop. “Other, more secure alternatives are widely available.”

Wyden took aim at “single-hop” VPNs that routes data through one server before arriving at the destination.

He cited a Congressional Research Service paper from last month that said “a single-hop VPN, however strongly encrypted, offers essentially no protection against an adversary who can compel… or infiltrate that one provider,” compared to “multi-hop and mixnet architectures [that] directly target and mitigate this weakness” since a second server only knows the IP address of the first server.

He also cited a letter responding to an earlier missive that Wyden signed with other lawmakers in an exchange with the Office of the Director of National Intelligence. The office offered a note of caution about scrutinizing VPN providers’ privacy and security policies, but Wyden said “it overlooked the importance of the VPN service’s architecture against sophisticated foreign threats.”

Wyden referenced an advisory from the NSA and allied foreign governments last September about a China-sponsored campaign to target telecommunications, government and military networks.

He said that the NSA should update its public guidance on VPN configuration.

“Americans facing advanced foreign threats — including government personnel, defense contractors, journalists, and human rights defenders — deserve clear, honest advice about how best to protect their communications from surveillance by foreign adversaries. 

He also asked Rudd to answer a series of questions in an unclassified reply. Some view single-hop commercial VPNs as sufficient for average internet users, and Wyden asked whether they were strong enough to protect “Americans’ sensitive digital footprints against foreign adversaries capable of monitoring internet backbones.”

And Wyden wants Rudd to weigh in on the importance and effectiveness of multi-hop anti-surveillance systems, like Apple Private Relay, Tor and Nym, as well as how multi-hop proxy systems fare against mixnet architectures.

You can read the full letter below.

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Citing cyber and other security threats, President Donald Trump signed an executive order Wednesday that declares a national emergency to secure the U.S. bulk-power system and aims to prohibit certain foreign-produced equipment, software and systems from being used in the  country.

The order says it forbids “any acquisition, importation, transfer, or installation” of such foreign-produced equipment if it’s determined to pose a significant national security risk.

“To deal with the threat to the national security, foreign policy, and economy of the United States, the Order, among other things, generally prohibits certain foreign-produced bulk-power system electric equipment, including associated critical software and digital capabilities that could pose cybersecurity or operational risks, from being purchased or installed in the United States, or appropriately conditions such purchases and installations to address those risks,” the White House said in a fact sheet.

The executive order is a response to fears of Chinese-made equipment housed within U.S. energy infrastructure, and a continuation of other measures from the Trump administration to shun that equipment.

The order, “Declaring a National Energy Emergency to Secure the United States Bulk-Power System,” cites “malicious cyber activities” as one impetus.

“The minimal restrictions on acquisition or operation in the United States of foreign-produced bulk-power system electric equipment augment the ability of some foreign entities to create and exploit vulnerabilities in such equipment; for instance, such equipment might have digital backdoors built into their systems that allow a foreign country to access that equipment remotely,” it states.

China supplies 85% of solar supply chain production capacity, according to the International Atomic Energy Agency, and China is a major player in the power transformer manufacturing business.

In 2024, then-FBI Director Christopehr Wray told Congress that hackers prepositioning themselves in small office and home routers had the electricity grid as one of their targets should China and the United States go to war.

Near the end of Trump’s first term he also signed an executive order seeking to limit the purchase of foreign-made bulk-power equipment. The Biden administration suspended that order, citing the need to review its scope, and revoked and replaced a related Energy Department order. Some utilities found compliance with the 2020 executive order difficult.

For the new order, the Energy Department has 120 days to develop rules to implement the order, in consultation with other key departments.

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Federal authorities Wednesday revealed a multi-layered Chinese state-sponsored espionage operation that’s targeted and compromised U.S. critical infrastructure, including multiple federal agencies, since 2018. 

Officials seized domains and unsealed an affidavit detailing how a Chinese government-funded front company assembled a botnet and complementary systems that allowed attackers to intrude highly sensitive networks.

The FBI and Justice Department said the state-sponsored group, known as “QTFY,” has targeted and intruded the networks of the Departments of Energy, Justice, Health and Human Services, the Federal Reserve, NASA, National Institutes of Health, and, unsuccessfully in March, the Senate. 

Financial institutions, defense contractors, utility companies, telecom providers and hospitals have also been targeted by the threat group, which includes former members of China’s military, according to court records. 

Officials said QTFY also attempted, but was unsuccessful, in gaining access to a U.S. election system in June. 

The long-running operation, which officials obstructed by seizing malicious infrastructure, provided an expansive set of services. QTFY’s full hacking suite allowed attackers to scan and exploit vulnerabilities, infect IoT devices for a botnet, and conceal or reroute traffic.

QTFY’s operation was comprehensive with features that provided continuous reconnaissance capabilities and flexibilities designed for specific targets or objectives, said Ryan English, information security engineer at Lumen Technologies’ Black Lotus Labs, which aided the disruption efforts. 

Officials said they seized three domains, which cut off access to QScan and QTRouter, the group’s primary platforms. 

“Today’s announcement demonstrates the Justice Department’s steadfast commitment to going on the offensive against cyber threats to national security,” John A. Eisenberg, assistant attorney general for national security, said in a statement. “These court-authorized seizures deny People’s Republic of China-linked hackers access to tools they use to mount online attacks against our nation’s critical infrastructure.”

The FBI, National Security Agency and Cyber National Mission Force released a joint cybersecurity advisory with QTFY’s known indicators of compromise Wednesday. Officials also detailed the China-linked hacking group’s affiliations and collaborations with other state-sponsored groups.

QTFY targeted sensitive networks in the U.S. and globally by exploiting vulnerabilities in multiple vendors’ products, including Pulse Secure, Fortinet, Citrix, Microsoft, F5, Kentico CMS, Atlassian Confluence, Ivanti, Check Point, CrushFTP and BeyondTrust, officials said.

QScan, the reconnaissance and vulnerability scanning tool, included more than 200 proof-of-concept exploits, according to court records. 

“It was designed for large-scale deployment. On a single day in 2024 for example, QScan processed over two million scanning and exploit tasks,” a special agent for the FBI said in the affidavit.

The Chinese hacking collective exploited multiple Ivanti zero-day vulnerabilities in September 2024 to intrude the networks of three DOE national laboratories, NIH, an HHS agency and a U.S.-based security device manufacturer. Officials said the seized domains were all used in those attacks. 

The FBI has been investigating QTFY, which operated out of a private China-based front company, Nanjing Xinjiuwei Network Technology Company, since at least 2019. The group has been consistently active for more than eight years. 

“Discovery of these private companies building networks for China is becoming more frequent,” English said. “We’re starting to see that when they’re getting exposed, some of these have been in business a few years before they’re found.”

The takedown follows a series of technical operations aimed at dismantling China state-sponsored attackers’ infrastructure, including an operation in early 2025 that allowed officials to remove PlugX malware from thousands of U.S.-based computers.

“State-sponsored malicious hackers preying on America’s critical infrastructure will be stopped and prosecuted,” Attorney General Todd Blanche said in a statement. “We are here to ensure security for the American people and will use every tool we have to keep that promise.”

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A newly-signed presidential memorandum enlisting private sector companies in federal law enforcement hacking operations against criminal organizations could present a number of legal, practical and moral pitfalls, cyber experts told CyberScoop a day after the order was released.

While some have celebrated the memo as an overdue maneuver to more aggressively combat cybercriminals, others view it as risky at best and potentially destructive at worst. Supporters, critics and everyone in between also said that how it plays out could be decided in the 60-day timeframe the memo sets to establish the program.

But ultimately, “it’s a massive shift in the cyber policy community,” said Michael Garcia, a former top official at the Cybersecurity and Infrastructure Agency. “This is a philosophical shift.”

The Concerns

On the most critical end of the spectrum is security consultant Davi Ottenheimer, who has been a proponent of concepts like “hack back” or “active defense” that envision a bigger role for the private sector. But he was unsparing in his criticism of the Trump memo. 

“It’s an embarrassment to America,” he told CyberScoop. “It’s like seeing somebody strapped onto a horse backwards, looking at the wrong end of a rifle.”

The Trump memo’s approach has been likened to the “letters of marque” concept used in early U.S. history, when it authorized sea privateers to attack and capture enemy ships and goods on behalf of the country. But Ottenheimer, founder of Ottenheimer GmbH, noted that the practice fell out of favor for good reason in the 1800s because of the violence it unleashed and how it contributed to mercenarism.

Additionally, the memo raises a number of targeting-related issues, he said. Ottenheimer is concerned about Trump’s intentions. The memo specifically pertains to the use of participating companies against transnational criminal organizations.

“Left-wing opposition, liberals, anti-fascists —they’re all criminals to him,” Ottenheimer said. “So to authorize attacking criminals under this means private organizations can go hack people that he designates as criminals.”

Under the memo, the program must establish legal and constitutional procedures for the prior approval of the targeting of U.S. citizens, as well as develop procedures to halt any unintentional targeting of U.S. people or systems. 

However, the limitation on targeting criminals only creates a perverse incentive for attackers and a peculiar defense for anyone who’s attacked, Ottenheimer said.

He envisioned a scenario for a company participating in the program where “you’re hacking [a target], and they go, ‘Hey, we’re the state.’ And then [private companies] are like, ‘Oh, I can’t hack you anymore.’ Boom. They decided when you can and can’t hack.”

Furthermore, “you incentivize people to know as little as possible so [operations] can be authorized,” he said.

The memo raises ethical concerns for him as well: “You can’t attack somebody and then say it’s your fault that you didn’t notify them you didn’t want to be attacked.”

“There’s no notice for you being designated. There’s no prevention of you being designated. There’s no way for you to know you’re being designated,” Ottenheimer said. “That’s like a person sitting down next to you and smoking a cigarette and blowing smoke in your face and saying, ‘Hey, you got to say you don’t like cancer if you don’t want me to do this to you right now.’”

Garcia, now vice president of the cybersecurity practice at Monument Advocacy, said he supports some of the ideas of the memo, but worries about how it will be executed.

“It comes down to attribution, and if you make a risky bet on who we’re attributing [attacks] to, that’s where things can get dicey,” Garcia told CyberScoop.

There could be pressure to attribute faster, which could perhaps lead to lower certainty about who’s being targeted, and that in turn could lead to a private sector company accidentally attacking a foreign government, he said.

That raises legal questions: “It’s in the Constitution —the federal government has the ability to wage war. And there are laws by which private citizens can’t take up arms,” Garcia said.

He wanted the memo to include court oversight of the program, similar to what’s been required for private sector takedown operations. .

Garcia also isn’t sure whether there will be a big enough pool of companies willing to jump into offensive cyber operations.

“From the lawyer perspective, it’s, ‘Are you okay with engaging in this kind of legal risk? And who knows what protections the government will provide?’” he said. “I’d be very curious to see what the foreign governments’ reactions are — ‘We’re going to cut ties with any participating company that engages in this.’”

Errata Security CEO Robert Graham wrote that under the program, companies “are not willy-nilly hacking back,” given the federal supervision elements. “Though, I wonder if it doesn’t eventually morph into law enforcement saying ‘Stop bothering us, just do what you think is best.’’” 

The Case For

The Trump administration and the memo’s supporters  have touted it as a means to put the United States on stronger ground in cyberspace. 

Amanda Naylor, the director of cyber policy at the National Security Council who worked on the memo, said on LinkedIn that it was designed “to bring the capabilities, speed, and innovation of the American private sector into the fight against transnational cybercrime and fraud.”

Former Trump White House cybersecurity official Joshua Steinman said he views the memo as a step toward “parity,” given how U.S. adversaries operate in cyberspace.

“The Chinese and the Russians do this at scale, and I guarantee you they have very few limiting tools when they do it,” said Steinman, now founder of the security firm Gavalnick. “It opens up an entire workforce that allows us to go out and achieve strategic objectives.”

The restrictions in the memo are important, he told CyberScoop.

“The most sensitive things are going to continue to be done by the uniformed and authorized civilian workforces, but there’s a lot of low-hanging fruit,” i.e., criminal organizations, Steinman said. He doesn’t have any fear of the program overstepping as a result.

“We operate like a Boy Scout in cyberspace,” he said. “It’s measured and reasoned.” He compared it to the Right to Try Act for medications.

He also said he expects to see a lot of interest in participating in the private sector.

Ari Redbord, global head of policy at TRM Labs, praised the memo too, calling it “a huge step toward empowering the private sector at a critical moment” that “has a real opportunity to be truly transformative.”

“Scammers are using AI to move with unprecedented speed and scale, stealing billions in life savings from average Americans and small businesses,” he said. “The private sector holds the data. The public sector holds the authorities. This [memo] puts them together.”

What’s Next

The coordination center charged with establishing the program under the memo has 60 days to complete its work. That process could determine a lot. Graham noted that the memo has a classified annex, too.

The memo as written is quiet about what becomes of any seized assets, Graham noted. Redbord raised the same topic as one of his questions about execution of the memo. 

“What government direction and control looks like in the middle of a live operation,” he said in listing his questions. “How disruption turns into actual dollars back in victims’ pockets, and whether we can build a true victim compensation fund as part of this program. What happens when an operation touches a third country with its own laws and its own interests. And how success gets measured, in money recovered and networks dismantled.”

Will Barker, cybersecurity adviser at Huntress, said what’s next could be key.

“The 60-day implementing guidance is where the real substance lives,” he said in a written quote. “Minimum standards, operational procedures, the adjudicatory framework for target selection.”

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Suspected Chinese hackers used open-source artificial intelligence models to run a cyberattack against the Taiwanese government in the first publicly known case of an autonomous AI hack hitting a government target, according to research published Wednesday.

The hackers extracted more than 2,500 personnel records, among other data, in the “near-autonomous attack,” researchers at Israeli cyber firm Dream wrote in a blog post. The attackers set up the framework so that it could “adapt mid-operation without human intervention.”

The framework “implements dedicated research phases it calls ‘Learning Cycles’ — autonomous sessions where the AI system searches vulnerability databases, GitHub repositories, and security research publications for techniques specifically applicable to its target government’s infrastructure,” the post reads.

And then it kept going.

“The attacker didn’t stop at primary targets,” Dream said. “It expanded the operation to government IT supply chain vendors, a nuclear safety agency, a government email system, and 7+ energy sector companies — scanning them all in parallel for misconfigurations, exposed admin interfaces, and exploitable vulnerabilities.”

It also learned from its mistakes as it went on, Dream said in identifying what stood out about the campaign.

Autonomous AI-powered cyberattacks have raised alarms in the past: Anthropic reported last fall that it stopped the first autonomous cyber espionage campaign, although researchers noted that the “autonomous” campaign still required significant human work. 

The Financial Times first reported the Dream research and details on the target.

The hackers used two popular open-source AI frameworks, Hermes and OpenClaw, to set up the Taiwan operation. They bypassed safety guardrails by framing the work as authorized penetration testing, according to Dream.

The firm discovered the operation via an online archive of 160 megabytes and nearly 1,400 files, revealing “a multi-agent AI system that achieved confirmed, real-world compromises against state infrastructure.”

As with the autonomous cyber espionage campaign uncovered last fall, the attack Dream examined also noted the need for human tinkering.

“We increasingly see threat actors leveraging AI for autonomous offensive operations,” the company wrote. “But building a system that actually works at this level takes more work than ‘just’ running a model. It demands careful adjustment to the specific task, optimization of agent coordination, and fine-tuning of decision logic — the kind of sophistication evident in this framework’s Bayesian prioritization, self-correction loops, and adaptive research cycles.”

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Senators from both parties Thursday probed Trump administration officials about whether federal agencies and foreign governments are coordinated enough in the battle against scammers, something witnesses told the Foreign Relations Committee they were working to remedy.

At least 13 federal agencies have authorities to counter scams, raising questions about whether someone needs to be in charge of all those efforts. And while there was some bipartisan sentiment at Thursday’s hearing that the Trump administration has taken good actions to battle scammers, both lawmakers and administration officials said that scam operations have demonstrated that cracking down on them in one place often just leads to them going elsewhere.

Sen. Pete Ricketts, R-Neb., compared the situation to an international initiative that gained prominence in the 1990s to counter drug trafficking, Joint Interagency Task Force South.

“Given that today’s scam centers are similarly transnational, combining cybercrime, human trafficking, money laundering and cryptocurrency, has the threat reached the point that we should establish a comparable multinational coordination mechanism?” he asked.

Sen. Jeanne Shaheen, D-N.H., focused on federal coordination: She paraphrased a former federal official who said, “there is nobody that is heading that effort up across agencies. We need to treat this like combat, and so we need somebody in charge.”

Shaheen, the top Democrat on the panel, is a co-sponsor of the bipartisan Scam Compound Accountability and Mobilization (SCAM) Act, which seeks to unify federal efforts on the subject.

A State Department official told Shaeen scammers were a national security priority for President Donald Trump, and that his executive order on the topic sought to tackle coordination.

“I do understand that this is a whole-of-government approach, and many agencies are focused on this,” said David Bedard, deputy assistant secretary at State’s Bureau of International Narcotics and Law Enforcement Affairs “The Action plan that was directed by the president is currently in the interagency review process to deconflict some of the concerns that you have raised. We certainly think the task force that will be implanted through the executive order will solve the problems you might be referencing.”

There’s also an international plan under the task force, he said. Currently, the administration shares intelligence on scammers with foreign allies, and Interpol has “productive” channels to work through there and is setting up its own task force, Bedard said, but there are concerns about other countries taking similar, duplicative action.

There have been signs of progress on the international front, Bedard and another State Department witness told the panel.

Michael DeSombre, assistant secretary at the Bureau of East Asian and Pacific Affairs, said Trump has raised the subject with Chinese President Xi Jinping, and that China has used its influence in Asia as its own citizens have become scam victims. Still, there’s been more progress in countries where the United States has stronger relations, such as Cambodia, than in those where ties aren’t as close, like Burma and Laos.

In Cambodia, one key has been pursuing scam center bosses first and foremost, Bedard said.

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The Trump administration’s haphazard and opaque interventions into artificial intelligence security matters could catapult Chinese alternatives into broader acceptance, posing new security risks altogether, a group of Democratic senators wrote to top administration officials Monday.

The five senators said that the administration’s handling has alternated between too passive, such as when OpenAI models escaped testing in the Hugging Face hack last month, and overstepping, such as when the Commerce Department suspended access for any foreign national to Anthropic’s Fable 5 and Mythos 5 in June.

“The Administration’s ad hoc and unpredictable approach undermines U.S. competitiveness, heightening market incentives to adopt open weight models from vendors based in the People’s Republic of China (PRC),” wrote Sens. Kristen Gillibrand of New York, Adam Schiff of California, Mark Warner of Virginia, Chris Coons of Delaware and Mark Kelly of Arizona.

In the Hugging Face hack, the senators wrote that “the Federal Government cannot be passive as these capabilities emerge.”

In the case of the Fable 5 and Mythos 5 suspensions, the senators said that the administration “utilized an infrequently used authority to direct Anthropic to suspend all access to its Fable 5 and Mythos 5 models for foreign nationals (including foreign national employees inside the United States) citing an undisclosed national security concern later described as a narrow jailbreak finding.”

Because Anthropic couldn’t immediately assess users’ nationality, the firm had to disable both models for everyone. The administration and Anthropic negotiated for 18 days behind closed doors before reaching an agreement, the lawmakers complained.

“While the Administration may have been responding to real security concerns to protect the United States, even justifiable interventions can create broader harm if the standards and decision-making processes are opaque, ad hoc, or unpredictable,” they said in their letter to leaders in the White House, Office of the National Cyber Director and departments of State, Treasury and Commerce. “Moreover, when the Executive Branch exercises authority delegated from Congress, such as in the conduct of export control administration, it is essential that it keep Congress fully apprised of its actions and procedures.”

During the time Anthropic was under export controls, the stock price of “an entity-listed Chinese lab” nearly doubled, the senators said. And while Hugging Face was breached, the company “had to” rely on a Chinese open-weight model due to guardrails on U.S. frontier models.

“If American models are perceived as subject to sudden access disruptions based on a black-box U.S. Government process, or as unreliable because U.S. AI labs are overcorrecting in the face of this black-box process, companies and governments in the United States and abroad may hedge by adopting Chinese or other foreign models instead,” the senators contended. “That outcome would undermine U.S. technological leadership while increasing exposure to systems that may carry risks of PRC or otherwise directed censorship, espionage, IP theft, and other supply chain security risks.”

Their letter asked for answers to questions about the standards the administration uses to determine the national security risks a frontier model presents, what legal authorities it will use to invoke restrictions, which agencies are responsible for which decisions and more.

None of the offices or departments the letter was addressed to immediately responded to a request for comment.

The letter follows inquiries at the state level, where 15 attorneys general asked OpenAI for more information regarding the security incident at Hugging Face.

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With identity protection services for millions of victims of the 2015 Office of Personnel Management breach set to expire, a group of lawmakers is making a push to extend them forever.

Sen. Mark Warner, D-Va., and Del. Eleanor Holmes Norton, D-D.C., introduced legislation to give lifetime identity protection coverage to around 4.2 million federal employees exposed in the historic breach by alleged Chinese hackers, which affected 22.1 million people. Warner said “the threat remains,” necessitating lifetime coverage.

That coverage is due to end at the end of September, as set by a 10-year authorization from Congress. That prompted the pair of lawmakers to introduce Reducing the Effects of the Cyberattack on OPM Victims Enduring Response and Protecting Identifiable Information Act, or  RECOVER PII Act.

“The data stolen included workers’ most sensitive and personal information – from Social Security numbers to security clearance records – and once that information is in the hands of a bad actor, you don’t get it back,” Warner said in a news release Monday. “We have a responsibility to stand by the federal workers who were put at risk through no fault of their own. This legislation will ensure those affected continue to receive the identity protection they need, while helping better safeguard personal information from future exploitation.”

But the bill could have an uphill climb, given the makeup of Congress and stance of the Trump administration.

The Democratic co-sponsors in the Senate are Tim Kaine of Virginia, with Angela Alsobrooks of Chris Van Hollen, both of Maryland. The Democratic House cosponsors are Reps. Don Beyer and James Walkinshaw of Virginia, with Steny Hoyer of Maryland.

Warner and Norton listed no co-sponsors from the GOP, which controls both chambers of Congress and the White House.  And OPM has declared the program too expensive based on the cost relative to the number of claims.

Similar legislation to extend the coverage, including from Norton, has fallen short in recent years.

“Lifetime identity protection is the only solution that will give the workers whose data was compromised the peace of mind they deserve,” Norton said Monday. “Because there is no limit on how long personal information can be exploited, Congress must protect these federal employees and contractors in perpetuity.”

Some watchdog scrutiny of the OPM program has been critical, and while consumer advocates say identity theft protections are helpful, they nonetheless say they aren’t adequate.

The Warner-Norton legislation also would offer reimbursements to federal employees and contractors for privacy services.

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President Donald Trump blamed Minnesota Friday for the cyberattacks its water systems have suffered in recent days, saying the state was “behind it.”

Trump said the state being “incompetent” was the issue, but it wasn’t clear whom he thought actually conducted cyberattacks that U.S. investigators have attributed to Iran — if, perhaps, somehow Minnesota incompetently cyberattacked itself. The White House referred a request for clarification back to Trump’s remarks.

“I think that Minnesota is behind it,” Trump told reporters Friday. “Because they’re grossly incompetent. I don’t think there was an Iranian cyberattack. I think Minnesota ought to get its act together.”

The White House also didn’t clarify whom the president believed was behind similar attacks in other states, when asked for comment. Trump has repeatedly used federal power aggressively in Minnesota, a state led by Gov. Tim Walz, a Democrat who was on the ticket that ran against him in 2024 as the vice presidential nominee. Trump also has downplayed Iranian attacks amid the war he launched against the nation with Israel in February.

A number of cyber experts quickly pushed back on Trump’s comments after he made them.

“Victim blaming in cyber is so 2000 and late,” cybersecurity pioneer Chris Wysopal, Veracode co-founder and chief security evangelist, said on the Bluesky social media platform. Said Jake Williams, a member of the IANS faculty: “His own intelligence services are attributing this to Iran.”

Andy Jabbour — founder and CEO of Gate 15, a cybersecurity firm which provides support to the water sector — told CyberScoop that, “speaking candidly, I’m not even sure what he was actually saying or suggesting Minnesota’s government did or didn’t do.”

“Attribution is tricky business,” he continued, referencing recent alerts from the Cybersecurity and Infrastructure Security Agency and others. “But logically, given an ongoing war with Iran, recent statements made by Iran-aligned threat groups, with assessments that the recent activity is aligned with recent CISA warnings, given yesterday’s statements from CISA and the FBI, random unsubstantiated allegations aimed at political opponents seem reckless and are a disservice to the American people.”

Walz struck back at Trump in a Facebook post, noting steps from his Department of Government Efficiency to slash federal funding. CISA has shrunken considerably under Trump, and his administration has pushed states to defend against cyberattacks that feds once countered.

“Trump knows exactly who is responsible for this attack, and knows that other states were hit too,” Walz said. “This is what modern warfare looks like, and it further illustrates there’s no plan to win a war with Iran.”

“DOGE took an axe to CISA and left the U.S. exposed to cyber attacks,” he continued. “Thankfully, our experts in Minnesota were able to identify the vulnerability quickly and work with local communities to stop it.”

A spokesperson for Minnesota IT Services, a state agency that has been responding to the water cyberattacks, declined to address Trump’s remarks.

“We remain focused on supporting affected communities, securing critical infrastructure and coordinating with local partners and federal officials as the investigation continues,” the spokesperson, Emily Zimmer, told CyberScoop. “We will not comment on political statements or speculate about attribution.”

Other cyber professionals declined to comment directly on Trump’s remarks, but offered thoughts on who was behind the attacks and their motives.

Bryson Bort, CEO and founder of Scythe said the evidence supports the attribution with Iran, and that it looks like hackers there found something they could exploit on the internet and seized the chance.

“This was a target of opportunity,” said Bort, co-founder of the ICS Village, a non-profit advancing awareness of industrial control system security; such systems are common in the water sector. “It wasn’t that Minnesota did something as a state to raise Iran’s ire.”

Cynthia Kaiser, a former top FBI cyber official, said that when the bureau conducts attributions, it looks at technical indicators but also who has the capability, who has conducted similar attacks in the past and what the purpose of the attacks is.

“Iran ticks all these kinds of things,” Kaiser, now senior vice president at cybersecurity firm Halcyon, told CyberScoop. “My view is, if it walks like a duck, if it talks like a duck, I strongly suspect it’s a duck. I’d be shocked if we found out it wasn’t Iran.”

Just last week, CISA updated an advisory about how Iranian hackers were targeting programmable logic controllers in the water sector and other sectors, a warning that the water industry’s information sharing and analysis center said it believed.

“WaterISAC is confident in our government partners’ assessment that the confirmed activity is aligned with the joint Cybersecurity Advisory (CSA) AA26-097A ‘Iranian-Affiliated Cyber Actors Exploit Programmable Logic Controllers Across U.S. Critical Infrastructure’ published and recently updated by CISA,” Tom Dobbins, executive director, WaterISAC, told CyberScoop. “We have evidence of earlier attacks from Iran even before this current conflict. Cyber attacks are the most viable way that Iran can directly attack our homeland, and it is logical that they would do so, especially given the challenges of absolute attribution.”

The water sector is often viewed as one of the most vulnerable critical infrastructure sectors, and Dobbins called on Congress to provide funding to provide funding for the ISAC.

Sen. Tina Smith, D-Minn., also took issue with Trump’s comments.

“The President provided an unserious response that is beneath the dignity of the office he holds. Iran’s purported cyberattack on Minnesota’s water infrastructure must be taken as a serious threat to our national security.  Smith said in a statement, adding that she’s been in touch with CISA and the FBI and was grateful to Minnesota’s IT experts. “The entire situation serves as a stark reminder of the danger this war puts us in the longer it drags on.”

Fellow Minnesota Democratic Sen. Amy Klobuchar had earlier been in touch with Sean Cairncross, the national cyber director and a Minnesota native, about the incident.

Trump has previously displayed a laissez-faire view toward other cyberattacks on the United States, such as when he’s been asked about Chinese and Russian cyberattacks and Trump shrugs them off as something America does, too.

He also has cast doubt before on his government officials’ assessments of who’s responsible for cyberattacks on the United States, such as when he asserted China rather than Russia was behind the landmark SolarWinds breach.

Updated 8/3/2026: with comments from Minnesota’s senators.

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One of the most difficult obstacles to overcome in the quantum race will be the supply chain, given how diffuse it is, a top White House official said Wednesday.

“Supply chain is one of the biggest challenges in my mind, and really, the challenge with the quantum supply chain is that quantum is not defined by a single hardware platform,” said Brad Blakestad, director of the National Quantum Coordination Office within the White House Office of Science and Technology Policy.

“If you look at the quantum computing technologies, the quantum sensing technologies, the networking — those are all different,” he said in a webinar hosted by Inside Cybersecurity and USTelecom. “And even within computing, there’s seven different modalities that use completely different components. So we have this not just one monolithic supply chain, but just a bunch of different supply chains that are kind of intertwined in various ways.”

Blakestad made his remarks a little more than a month after President Donald Trump signed two executive orders on quantum computing. He referenced proposed ways to address the supply chain challenge in one of the orders.

“The other major issue or challenge that we face right now is that we’re on the cusp of quantum exploding from a commercialization perspective, but we’re not quite there yet,” he said. “So there’s not the funding, the revenue coming from large-scale quantum companies at this point to really make the supply chain as robust as you would want. So thinking about it from the government perspective, it’s just [that] there are too many places that I would want to bolster and not enough funding to do it.”

Blakestad touted steps to help that along such as the government buying widgets from a company that makes them to certain specifications, or prize challenges.

The quantum supply chain isn’t just diffuse in the United States, an International Institute for Strategic Studies policy paper noted Wednesday. It’s “inherently international: no single country dominates the supply chain, whether specialised materials, cryogenic equipment, hardware, software, fabrication or algorithms,” the authors, Dongyoun Cho and Maria Shagina, wrote.

And a March report from the Center for a New American Security identified strengthening the quantum supply chain as pivotal to the United States seizing the benefits of the technology, citing gaps in the U.S. supply chain and reliance on foreign suppliers such as China and Russia. 

Supply chain wasn’t the only obstacle Blakestad mentioned as looming large.

“The encryption challenge is a real challenge, and we want to make sure that we are aware of when quantum computers will ultimately get to a scale that they start having these sorts of implications and move as quickly as we can,” he said. “So, just by owning the technologies, by owning the workforce, by making the United States the place that people want to come to be on the cutting edge of this technology, I think that kind of addresses both of those issues, and that’s what makes it so critical.”

Another difficulty is measuring progress, Blakestad said: “It’s also very, very hard to benchmark, and to know that you’re actually doing what you’re supposed to, what you are intending to do.”

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A top White House technology official is accusing a Chinese company of distilling Anthropic’s models to create their own AI product.

Michael Kratsios, who leads the White House Office of Science and Technology Policy, claimed that Moonshot AI, a Beijing, China-based AI company, had distilled Anthropic’s recently-released Fable model to develop its own K3 model.

“To do this they developed a sophisticated internal platform to conduct large scale distillation against U.S. models, allowing them to quickly switch between multiple methods of access to avoid detection,” Kratsios wrote on X Wednesday.

Kratsios also said the company has used GB300 servers – either newly acquired or through Thailand – to train its AI models.

“The United States strongly supports the free and fair development of AI, including a thriving competitive ecosystem that spans frontier models, specialized systems, open-source frameworks, and open-weight models,” Kratsios continued. “Legitimate AI distillation used to create smaller, more efficient models plays a vital role in this open innovation ecosystem. However, large-scale, covert industrial distillation aimed at stealing proprietary U.S. technology and undermining American research is unacceptable.”

Kratsios did not provide details on how the U.S. government learned that K3 had been distilled from Anthropic’s model. 

Frontier AI companies in the U.S. have pressed policymakers to make it more difficult for third-parties to copy or duplicate advanced commercial models, calling it a form of intellectual property theft.

On their website, Moonshot AI describes its Kimi K3 model as the first open 2.8 trillion parameter model, and promotes its lower token costs while still delivering near-frontier performance. 

“While its overall performance still trails the most powerful proprietary models, Claude Fable 5 and GPT 5.6 Sol, Kimi K3 demonstrated frontier-level performance across our evaluation suite, consistently outperforming other tested models,” the company said on its website. 

A request for comment sent to Moonshot AI was not returned before this article’s publication. 

Piyush Sharma, CEO of Tuskira, an AI cybersecurity detection and response company, said distillation of AI models allows developers many of a model’s core capabilities. He pointed to another example when Anthropic earlier this year accused Chinese company Alibaba of distilling their Claude AI model.

According to Anthropic, the campaign used 25,000 fraudulent accounts to run 28.8 million interactions on Claude over six weeks. Given that kind of volume “the goal was clearly replication,” he said. 

“When a model has learned to reason through software weaknesses, security gaps, and attack paths, copying its behavior also copies that analytical capability,” said Sharma.

In April, Rep. Andrew Garbarino, R-N.Y., who chairs the House Homeland Security Committee and Rep. John Moolenaar, R-Mich., Chair of the Select Committee on China, announced they were conducting a joint investigation into the integration of Chinese AI models.

The committees said the inquiry will also focus on “examining a pattern of conduct by [Chinese]-based AI laboratories involving the large-scale theft of proprietary capabilities from American frontier AI systems through adversarial distillation” as well as “ the redistribution of those stolen capabilities as open-weight models available for global download, and the incorporation of PRC-origin models into products used daily by hundreds of thousands of American developers and engineers.”

Western governments and industry accuse Chinese companies of routinely stealing their technology, intellectual property and other trade secrets, often with the tacit support of Beijing. The copying of AI models would continue a long and established tradition of Chinese-sponsored intellectual property theft.

However, while distillation attacks by foreign governments or companies on U.S. frontier companies can have real national security implications, it’s still a fraught question of where policymakers should draw the line.

The AI industry, which includes not just frontier companies but large businesses with their own bespoke models, smaller proprietary startups and a vibrant open-source ecosystem, routinely share and use third-party data, including critical code and training sets for AI models.

Further, U.S. frontier AI companies have built and trained their world leading models in large part by crawling the open internet, ingesting content created and produced by others. Critics (and multiple ongoing lawsuits) argue that AI companies like OpenAI and Anthropic built their empires on data and content from others, taken almost entirely without consent or compensation.

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State and local officials and election security experts largely panned a Thursday night primetime speech by President Donald Trump, saying it was reflective of White House “desperation” to find any credible evidence to support their claims that U.S. elections have been rigged against the two-term president.

While the White House teased explosive new claims about the potential compromise of U.S. elections by China, Trump’s speech was a rehash of claims that both have no supporting evidence and have been repeatedly debunked when investigated. 

David Becker, executive director of the Center for Election Innovation and Research and a former voting and civil rights attorney at the Department of Justice, said none of Trump’s claims or allegations were new or substantively different from previous theories he’s been espousing over the past six years.

“The White House promised a bombshell and they delivered a dud,” Becker said on a call with reporters Friday. “There was nothing that even calls into question past elections — certainly not the 2020 election.”

The administration declassified a huge tranche of documents from the intelligence agencies, and news outlets continue to sift through them, but thus far nothing has been found that remotely validates the administration’s claims about foreign interference from China costing Trump the 2020 election.

In fact, some of the most relevant documents found at this point have supported the opposite conclusion, with agencies assessing that while China engaged in influence campaigns around the election, it was not attempting to outright interfere with U.S. election infrastructure, hack voting machines or manipulate ballots.

John Solomon, a former journalist and opinion writer at The Hill brought in by the White House to lead the investigation, also told reporters Thursday that his search hasn’t turned up evidence that the 2020, 2022 or 2024 elections were affected by fraud.

The one new major claim by Trump — that the Department of Homeland Security determined hundreds of thousands of noncitizens were registered to vote across four states — is almost certainly false or overinflated, given that it contradicts post-election state audits that have routinely found single or double-digit numbers of noncitizens registered to vote within a single state across multiple elections.

Over the past six years, similar claims by GOP secretaries of state and political activists purporting to find mass numbers of noncitizens registered to vote have turned out to be grossly inflated due to shoddy data analysis, and the vast majority of cases involving “suspected noncitizens” turn out to be U.S. citizens who are legally registered to vote.

The White House has provided little to no information on the methodology used to flag and identify supposed noncitizen voters, other than alluding to the use of “commercial data” and federal databases. A federal court recently ordered DHS to dismantle the SAVE database, its primary database for verifying the citizenship status of U.S. voters, because it was unreliable and violated longstanding privacy laws. 

 Apart from DHS admitting its own data on citizenship is incomplete, Becker said using a list that relies on matching voter files with commercial data is not a reliable way of determining citizenship.

“It is impossible to take a public voter file with very little information that is uniquely identified, like a driver’s license number, and compare it to a commercial database and say for sure the Maria Rodriguez or the John Lee or the Shawn O’Hara you have on that is the same person,” he said.

Election officials also responded forcefully. Nevada Democratic Secretary of State Francisco Aguilar said that Trump has spent a decade attempting to manufacture a crisis around voter fraud and the president’s speech Thursday night was an extension of that effort. 

“As Nevada’s chief elections officer, it’s my job to call balls and strikes — so when the President lies, I am obligated to call him out,” Aguilar said in a statement. “The facts have not changed: Nevada’s elections are among the safest, most secure and accessible in the nation.”

It’s not just Democrats that have objected to the administration’s efforts. GOP states have gone to court to block the Department of Justice from obtaining their voter data, and Idaho’s Republican secretary of state responded to a DOJ letter threatening prosecution of election officials as “not well met” and potentially illegal under state ethics laws. 

Trump’s speech potentially casts additional light on recent White House decisions, such as firing all three commissioners on the Election Assistance Commission. The agency helps certify voting machines for security, and all three commissioners have served across administrations and maintain close relationships with state and local election officials.  

Pamela Smith, CEO of the nonprofit Verified Voting, said that while the EAC can’t take certain actions that need commissioner approval, “critical functions like voting system testing and certification can continue under the existing framework and should not be affected.”

In 2020, Trump’s initial claims of widespread election fraud were undercut by leaders at the Cybersecurity and Infrastructure Security Agency, which said there was no evidence the election was compromised. The removal of EAC commissioners could represent an attempt to preempt any efforts to rebut or criticize White House claims that elections and voting machines have been compromised.

Some have worried that Trump could use the speech as a pretext to declare a national emergency or cancel elections.

Tom Lopach, CEO of the Voter Participation Center, said “you don’t dismantle election security infrastructure if you’re serious about protecting elections.”

“You dismantle it if you’re planning to claim, without evidence, that the system failed you,” he said. 

While Becker takes Trump’s broadsides against state election authority seriously, he also said it’s important not to lose sight of the fact that, in his view, the administration is losing the argument across the board.

More than a dozen federal courts have unanimously rejected the federal government’s attempts to forcibly obtain state voter data, while other courts have rejected core pieces of his election-related executive orders. State officials have publicly — and at times, angrily — pushed back on the administration’s demands as blatant federal overreach. 

Becker predicted that such an act would be quickly shot down by courts as well, noting that the U.S. has never canceled or postponed an election in its 250-year history, including when British troops were marauding on American soil during the War of 1812 or even at the height of the Civil War.

It’s important not to conflate the White House’s bluster and intentions with its actual authorities or capability to seize control of U.S. elections.

“This is what panic and desperation look like,” Becker said. “They’ve had 18 months in total control of the federal government and they have found nothing that would support President Trump’s lies about the 2020 election, and so they’re just trying to grab as much garbage as they can and throw it up against the wall, and it’s not sticking.”

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