Nearly two of every 10 U.S. water and wastewater organizations have identity data actively exposed from infostealers harvesting their credentials, according to research published Tuesday.

The study from identity risk firm SpyCloud follows months of reports about a wave of cyberattacks hitting targets in the sector, which U.S. government officials suspect are tied to Iran.

The company built a database of 66,845 Environmental Protection Agency-registered systems, examined internet domains and ultimately analyzed 10,000 organizations, finding that 1,787 showed active infostealer exposure.

In one case, a single infected device at a smart meter technology provider that SpyCloud didn’t name contained saved logins linked to roughly 167 different U.S. utility metering tenants — meaning that one exposure opened the door to many more. 

That “cascading supply chain exposure” was one of the biggest findings of the report that SpyCloud shared exclusively with CyberScoop, said Jason Lancaster, chief investigations officer at the cyber firm, along with the quantitative approach” to measure exposure overall.

“We talk about it a lot,” Lancaster said of the exponential risk that one exposure can present. “There’s examples here and there, but that was a standout example of, here’s a tangible thing that is an exposure right now.”

Generally, “Infostealer exposure means the attacker isn’t guessing anymore, they’ve got legitimate points of entry,” Lancaster said. “In the investigations I’ve worked, that log data usually contains stolen session cookies, credentials, and autofill info pulled straight off the infected device. That’s enough to walk right past [multifactor authentication] by hijacking an already-authenticated session, log into corporate email or VPNs without raising a single alert, and sit there quietly for weeks while they map out the network.”

Still, the study had limitations. It doesn’t address what apparently led to the cyberattacks that unfolded in Minnesota and elsewhere this summer: internet-exposed programmable logic controllers.

It’s “important to note that our research did not focus on OT devices which run the most critical processes within these utilities, and any exposure we cite herein should not be interpreted as exposure of specific OT devices,” the report said. It did, however, find that 258 of the 1,787 organizations with active infostealer exposure carried credentials to operational technology or remote-access systems.

Some of the report’s conclusions were about the limitations of the data itself.

“Exposure concentrated in larger operators and in the vendor supply chain; small utilities were largely underrepresented,” SpyCloud said. “That’s a pattern in the data, not a claim that every water system nationwide carries this risk — and it measures identity exposure, not confirmed intrusion.”

It’s the first study of its kind that SpyCloud has done for a specific industry, so the company doesn’t have comparisons to other industries, Lancaster said. SpyCloud has begun a responsible disclosure process for those affected within its report, he said, beginning with a briefing for the Cybersecurity and Infrastructure Security Agency.

“It’s important to remember, infostealer logs aren’t the end of an incident — they are often the beginning,” Lancaster said. “Access brokers sell these logs specifically because ransomware crews and other fraudsters want exactly this kind of entry point. So, the real question isn’t whether the exposure is dangerous. It’s how much time you have before someone weaponizes that stolen data against you.”

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Hackers are targeting water, food, energy, chemical, manufacturing and commercial facilities by taking aim at Siemens S7 Series programmable logic controllers (PLCs) and making use of artificial intelligence in the attacks, U.S. government agencies warned Wednesday.

It’s the latest government warning about attacks on critical infrastructure as the United States wages war against Iran, which the government blamed for a recent campaign against water and wastewater systems— but doesn’t mention in Wednesday’s alert. 

The National Security Agency didn’t immediately respond to a request for comment about who was behind the attacks on the PLCs, which are used to control manufacturing processes.

The agencies said the attacks were an “active threat,” rather than a theoretical one. The attacks could disrupt critical industrial processes, cause safety incidents or lead to the compromise of sensitive data.

Wednesday’s alert from the NSA, Cybersecurity and Infrastructure Security Agency, FBI, Energy Department and Environmental Protection Agency makes special note of the hackers using AI-generated exploitation scripts in the attacks.

“Using AI to generate exploitation scripts represents an evolution in threat actor capabilities, dramatically reducing the technical expertise and time required to develop working ICS exploitation scripts and malicious tools,” the alert states. “In addition, AI enables adversaries to rapidly leverage additional attack vectors and adapt to defensive measures. Threat actors can easily collect public information about vulnerabilities and weaknesses, find exposed and exploitable PLCs, and use AI-generated scripts to act on that information.”

A former top CISA official, Michael Garcia, thought that it was a first for the agency in one of its cybersecurity advisories (CSAs) about operational technology (OT).

“It is the first alert I have seen where CISA is saying in a CSA that a malicious actor is using AI scripts to target OT systems,” Garcia, now vice president of the cybersecurity practice at Monument Policy Advocacy, said on LinkedIn. But the advisory doesn’t recommend using AI in response, instead focusing on well-known, traditional defensive measures, he added.

Frenos, an OT penetration testing company, found another element of the alert troubling: The method by which the attackers could use the approach beyond Siemens-made PLCs.

“Siemens S7 is the subject here, but the exposure pattern is not brand specific,” Brian Proctor, CEO of the company, said in an email. “An adversary who has mapped your data blocks understands your process. They know what normal looks like, which means they know what an operator would fail to notice.”

The AI-generated scripts are disguised as legitimate monitoring tools, the advisory said of the hackers behind them.

“The actors leverage Internet scanning services to find Internet-exposed PLCs running outdated software or that are otherwise poorly protected,” the advisory reads.

Siemens said it was “aware” of the alert and “is coordinating closely with CISA.”

“This advisory does not describe new vulnerabilities within the S7 Series programmable logic controllers (PLC). Instead, this reflects threat actors employing new techniques to exploit potential misconfigurations,” the company continued, noting a security bulletin it issued last month.

“Siemens will provide updates around this issue to potentially affected customers through our ProductCERT team,” it said. “At this point in time, we have not identified increased attack levels or unknown vulnerabilities in Siemens ICS products.”

Updated 8/20/2026: to include Siemens comment.

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