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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As part of its “economic D-Day” against Iran, the Treasury Department designated four Iranians for sanctions Monday stemming from their alleged role in hacking critical infrastructure targets and waging cybertheft against the United States.

It’s the second time in as many weeks that the Trump administration has taken aim at the same group of alleged hackers, following on an indictment recently unsealed against cybercriminals that federal law enforcement authorities say are affiliated with the Tehran-based Mabna Institute.

A Treasury Department release points the finger at three people — Keyvan Fayyaz Ghareh Blagh, Saber Shahbazi Balujeh, Mohammad Reza Kadkhoda’i and Mojtaba Ghal’eh-Kuhi — as specifically conducting the hacks.

“Since at least late 2023, these three individuals have successfully compromised and exfiltrated data from multiple U.S. companies in various critical infrastructure sectors, including energy companies, defense contractors, healthcare institutions, information technology companies, and financial institutions,” the release states.

A fourth individual included in Monday’s sanctions, Mojtaba Ghal’eh-Kuhi, is listed as one of the leaders of the gang carrying out the Ministry of Intelligence and Security (MOIS)-directed attacks. Another listed leader, Behzad Mesri, first faced sanctions in 2018, as part of another round of sanctions focused on the Mabna Institute.

Finally, the Treasury Department designated one additional person Monday over related activity, Arman Kahzadian, for his alleged role in receiving or using business information stolen via cyber-enabled means.

The department said the Iranian hackers sometimes turn their gaze to domestic targets.

“The members of this group are also heavily motivated by personal enrichment and greed, leading some members to prioritize their own profits over operations that benefit the MOIS,” it said. “This has driven some of the group to target Iranian companies.“

Hackers that the U.S. government has identified as Iranian have been behind a spate of attacks on U.S. water facilities, despite denials from President Donald Trump himself about Iranian culpability.  The Treasury Department did not immediately respond to a request for comment Monday about whether the sanctions designees were involved in those attacks, nor has the National Security Agency responded to requests for comment on whether Iran was responsible for attacks at the center of an alert about attacks on water facilities.

Treasury Secretary Scott Bessent announced a fuller list of sanctions Monday as the war with Iran nears its five-month anniversary with no end in apparent sight.

“In the Second World War, D-Day marked the historic beginning of a campaign with our allies to target and drive the enemy from its positions, including those in third countries,” he said. “Today, in that same spirit, we are launching an economic onslaught against Iran’s financial connections around the globe. Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone.”

There are questions about whether the sanctions themselves are likely to change any behavior, particularly based on how they will be enforced. Iran has vowed “consequences” for the United States.

As part of the sanctions announced Monday, according to the department, “Treasury is expanding the categories of Iran-related conduct that may be subject to secondary sanctions in the future, making it easier to take action against those facilitating the regime. Treasury has issued determinations against five critical sectors –– digital assets, technology, gold, aviation, and shipping––  that the Iranian regime uses to try to prop up its failing economy.”

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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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Three Russian nationals and a pair of bulletproof hosting providers directly supported a series of attacks on critical infrastructure in 21 states and several countries, according to a 2024 indictment unsealed in federal court Tuesday. 

Officials, who have been investigating the trio and their companies since 2019, said the attacks resulted in losses surpassing $62 million.

Alexander Alexandrovich Volosovik, the 43-year-old owner of Media Land; Yulia Vladimirovna Pankova, the 29-year-old owner of ML.Cloud; and 34-year-old Kirill Andreevich Zatolokin were charged with conspiracy to commit and aid computer fraud, conspiracy to commit wire fraud, wire fraud and conspiracy to commit money laundering.

The State Department also offered a reward up to $10 million for information on government-linked associates of the alleged cybercriminals and malicious use of Media Land or ML.Cloud. The Treasury Department and officials from the United Kingdom and Australia imposed sanctions on Volosovik, Zatolokin, Pankova, Media Land and ML.Cloud in November 2025. 

The three accused Russians, Media Land and ML.Cloud were all based in St. Petersburg as of 2024.

“With today’s actions, the FBI and our partners are striking at the core services that cybercriminals rely on to attack U.S. critical infrastructure,” Brett Leatherman, assistant director of the FBI Cyber Division, said in a statement. “This is another step in our broader campaign to shrink the space in which these actors can operate, forcing them to work harder, take greater risks, and lose the anonymity they depend on.”

Media Land and ML.Cloud allegedly provided cybercriminals with infrastructure and technical support to infect systems with malware and ransomware for extortion. Officials said the organizations also supported criminal marketplaces, fraudulent domain registrations and platforms that cybercriminals used to commit phishing and brute-force attacks.

Officials said they identified a consistent and long-running pattern of criminal activities facilitated by Volosovik, Pankova, Zatolokin, Media Land and ML.Cloud.

Investigators located victims across 21 states, including nine cities in the Northern District of Ohio, where the indictment was filed. Additional victims were located in Australia, the European Union, the United Arab Emirates, Canada and the United Kingdom.

Bulletproof hosting providers are increasingly used by cybercriminals to obfuscate their activities, deliver malware, phishing, and host content and services that support ransomware, data extortion and denial-of-service attacks.

“From their overseas safe haven, these defendants ran the criminal infrastructure that powered attacks on critical institutions across our nation,” A. Tysen Duva, assistant attorney general of the Justice Department’s Criminal Division, said in a statement. “Their actions put the American public at risk. We will continue to dismantle these networks and protect our critical infrastructure from cybercriminals at home and abroad.”

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The Trump administration unveiled its new federal clearinghouse for sharing AI cyber threat information between the government and private sector, and said the project is already receiving threat intelligence on cybersecurity vulnerabilities and prioritizing patching.

Created last month through a White House executive order, “Gold Eagle” will be managed by the Department of the Treasury, with contributions from the Cybersecurity and Infrastructure Security Agency, Department of Homeland Security, and Department of Defense, as well as open-source software providers, critical infrastructure operators and industry.

“Under President Trump’s leadership, the Treasury Department is working hand in hand with the private sector to safeguard our financial institutions, close vulnerabilities, and protect the integrity of the U.S. financial system,” Secretary of the Treasury Scott Bessent said in a statement. “Treasury, along with our partner agencies, will continue to harness frontier AI capabilities to stay ahead of our adversaries and defend the American people from emerging threats.”

Gold Eagle is meant to help both public and private organizations find, fix and patch vulnerabilities found using AI tools before they’re discovered and exploited by bad actors. The work will involve using AI to find cybersecurity vulnerabilities in victim systems and software, and Secretary of Homeland Security Markwayne Mullin said it would also further explore ways for the technology to be leveraged for cyber defense.

A senior White House official told reporters on a background call that closed source models from frontier AI models, including Anthropic’s Mythos, will be used to discover vulnerabilities.

White House officials said they worked with the Software Engineering Institute, SEI at Carnegie Mellon University to develop a new platform, the Vulnerability Information and Coordination Environment – or VINTS – to receive third-party reports on AI-discovered vulnerabilities. According to the White House, the system has already begun collecting intelligence on vulnerabilities and prioritizing patches.

“I think on the early side of this, we have seen that the scale of vulnerability discovery, particularly with users of new technology to scan their system, is something that is a step function change [than] we’ve seen seen before,” the official said.

As AI models have improved at carrying out core cybersecurity-related tasks – like scanning code for vulnerabilities or developing proof-of-concept exploit code – cybersecurity experts and policymakers have become increasingly worried. The modern internet is rife with insecure code, misconfigurations and other mistakes that can be identified and exploited faster than ever before using AI tools.

Vulnerabilities in open-source software can be both widespread and hidden, as many commercial software products on the market rely on open-source code but few bother to document it. When hackers compromised a logging tool in the Log4J open-source Apache software library in 2021, it required a massive, multi-month coordination effort by CISA, the private sector and other stakeholders to find and fix affected pieces of software.

The White House official said the work of Gold Eagle is reflective of the administration’s “full support” of U.S. open-source software providers and maintainers.

Open source tools are “vital to systems that run throughout our country and daily life,” a senior administration official said, speaking to reporters on background. “It is being maintained by a talented group of people and entities and we will do everything we can to support the strength of that community.”

Michael Daniel, former White House cyber coordinator under President Barack Obama, told CyberScoop that AI is still so new that policymakers continue to observe its impact and adapt. While some existing communication channels for sharing cybersecurity threat information could probably be duplicated for tracking AI threats, there is still much for policymakers to learn more about the technology, the kind of threats it produces and its ecosystem of stakeholders.

“It may turn out at the end of the day that phishing is still phishing, and the fact that now you’ve got AI tools doing it, it’s still phishing. Or there may be something fundamentally different about it that we need to figure out how to combat and share information around,” he said.

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The Treasury Department is slapping sanctions on First VPN and its administrator for allegedly selling services to ransomware operators, as well as another person aiding ransomware gangs.

First VPN Services, or 1VPNS, was “deeply embedded in the cybercriminal ecosystem” and appeared in virtually every Europol investigation in recent years, the law enforcement body said after a sting targeting the service in May.

Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 1VPNS as well as its alleged administrator, Ukrainian citizen Dmytro Rashevskyi, Monday in conjunction with the United Kingdom. The outfit provided anonymity services that could be legitimate in some instances, but 1VPNS advertised itself in online cybercrime forums for more than a decade, touting its refusal to cooperate with law enforcement, the office said.

“Numerous ransomware groups have purchased infrastructure from 1VPNS, which they have leveraged in attacks on U.S. companies and institutions — including to hide the origins of their attacks, deploy malware, and manage exfiltrated data,” OFAC said. “Victims of ransomware attacks that involved the use of 1VPNS infrastructure have included U.S. businesses, financial services companies, hospitals, and municipal governments.”

Treasury also sanctioned Belarus national Yegeniy Vladimirovich Silayev for allegedly selling “cryptors,” tools used to disguise ransomware and other malware, to ransomware operators.

“Unlike legitimate encryption tools, which are designed to protect data and the privacy of the people that own it, cryptors are built specifically to make malware stealthier and more effective by disguising it as harmless files,” OFAC said.

Treasury’s sanctions designations dovetail with separate, unrelated cyber sanctions that European governments from Monday. The FBI has previously issued an alert about First VPN Service. 

Blockchain intelligence firm TRM Labs said it has seen 1VPNS selling its services to ransomware operators for prices ranging from $723 for Anubis to $58 Sinobi.

“The amounts are small because infrastructure subscriptions are small,” Ari Redbord, global head of policy and government affairs for the company, wrote on LinkedIn. “A named ransomware group paying a named enabler on public chains still leaves a trail investigators can follow after the fact.”

Victims tied to First VPN Service infrastructure include U.S. municipalities, hospitals and financial services companies.

Europol said it had arrested the administrator of 1VPNS in its May sting, but did not name them. 

The Treasury Department did not immediately respond to a question about whether its sanctions targeted that same arrested person.

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