SITUATION UPDATE: Following GMO Internet's refusal to pay a $50M ransom, the hackers behind the breach have promised to trigger ransomware covertly planted on customers' PCs via the cloud. GMO is urging users to unplug network cables, and power off their PCs before noon today.

SITUATION DETECTED: Anduril has partnered with Qualcomm to develop American-made computers for the military, government, & critical industries, with its first laptop planned for 2027.

Situation of the Week 10/19-10/25: Black October Though real-world impacts have lagged behind, AI has been cyber-capable for quite some time now. Anthropic finished training Claude Mythos Preview in February. It was substantially better than previous models at cyber tasks, so instead of releasing it right away, Anthropic and industry partners secretly launched Project Glasswing to find and fix vulnerabilities in open-source software so they couldn’t be exploited. Anthropic announced Mythos and Glasswing in April, but didn’t release a Mythos-class model to the public until Fable in June, when they had built strong enough safeguards to block the model from doing cyber tasks. Other labs soon caught up. In May, OpenAI launched Daybreak, their own version of Project Glasswing, and in July, they caught up to the cyber frontier with GPT-5.6 Sol. Chinese labs kept pace a few months behind, with Z.ai’s GLM-5.2 in June, then Moonshot AI’s Kimi K3 in July, and finally Z.ai’s GLM-5.3 in August, which was about as cyber-capable as early Mythos. Yet despite the Cyber ECI climbing steadily month after month, and despite warnings from cyber experts growing louder and louder, there was no increase whatsoever in cyberattacks on American citizens between June and September. Then, all of a sudden, the last week saw a flood of disclosed vulnerabilities in various important pieces of software. A quick timeline: Monday: A Chinese hacker used just $5k of tokens to break into over 100 websites, including ones owned by major companies like Deere, SharkNinja, and Cummins, using the penetration-testing agent harness Cairn. Anthropic announces OSS Scanner, a free service scanning open-source code repositories for vulnerabilities. Tuesday: Vals AI finds that the open-weight DeepSeek-V4.1-Flash-1017 (released on October 17), beats the cyber-enabled version of GPT-6 Sol (released less than a month earlier, on September 22), on their offensive cybersecurity evaluation. Fortinet, a major cybersecurity company, announces that they will release a set of security updates across their products to help defend against agentic cyberattacks. Wednesday: Two critical vulnerabilities in PHP, a scripting language powering the majority of sites on the Internet, are patched with the help of OpenAI’s Patch the Planet program. The NSA urges all organizations using PHP to update immediately, or take their systems offline until the vulnerability can be mitigated. GitLab, a software development platform with over 50 million users, releases a critical patch to fix a vulnerability that allowed for remote code execution. Node.js releases a critical patch for their own remote code execution bug. Railway, a platform for deploying software in the cloud, discloses a major breach where attackers were able to access ~100k customer environment variables, and urges users to rotate their API keys. LiteLLM, an LLM gateway, discloses their own breach. Jason D. Clinton, Deputy Chief Information Security Officer of Anthropic, says “things are going to get a lot worse before they get better.” Thursday: Axios reports on banks seeing a major increase in unauthorized agent activity in user accounts, though most of this is users’ personal agents acting on their behalf. Abliteration¹, a startup that sells access to open-weight models with cyber guardrails removed, releases abliterated-model-large-flash, an abliterated version of DeepSeek-V4.1-Flash-1017. Quest Diagnostics, a healthcare company serving tens of millions of Americans, announces it was breached and sensitive patient information was stolen. Sam Altman says “I no longer think we’re going to be able to just patch all the bugs. We’ll have to use the same AI technology to build a new kind of defense shield.” Matthew Prince, CEO of internet infrastructure company Cloudflare, says he is aware of “a bunch of additional severe vulnerabilities that are present in other pieces of critical software” and says “I think we’re going to have a couple years where every single week it’s going to feel like the sky is falling.” Moonshot AI releases Kimi K3.1 Pro, which outperforms all publicly available models on cyber tasks, even despite Moonshot saying it will not push the absolute cyber frontier. X users take to calling the recent slate of cyber incidents “Black October.” Friday: OpenAI reveals that the vulnerability in Node.js came from Brotli, a compression library used in a lot of software, including the JavaScript runtime environment Bun (now owned by Anthropic and a critical part of Claude Code). Saturday: GMO Internet Group, Japan’s largest internet infrastructure company, experiences a major cyberattack where some users’ financial accounts were drained. They call for help from the government, and CEO Masatoshi Kumagai says that “the Internet itself is on the verge of collapse.” So, will there be major disruptions to the Internet or real life? Something like the French supermarket hacks from last week that shut down refrigeration systems and forced hundreds of markets to throw out food, but at a much larger scale? It’s not clear. On the one hand, the trend lines are clear. AI is getting increasingly powerful and its capabilities are getting increasingly diffuse, and attack surfaces are just so vast. Defenders have to patch all the vulnerabilities, while attackers only have to exploit one of them. “Security by obscurity” is now completely inadequate, as agent swarms can scan for vulnerabilities more tirelessly than any human. On the other hand, most of the cyber incidents reported (so far) are disclosures of vulnerabilities that have already been patched. Markets don’t seem to be reacting much. SPY fell 0.95% over the past week. CIBR, the First Trust NASDAQ Cybersecurity ETF, rose 5.91%. VIX, a measure of volatility, rose 5.82%, a negligible spike compared to major world events from the last few years like COVID, Trump’s Liberation Day tariffs, or the Iran War. And defenders are much better-resourced than attackers. So maybe agentic botnets will overwhelm the cyber infrastructure that we take for granted, forcing much of the internet offline as defenders scramble to take them down, and impacting people’s lives like COVID. Or maybe society’s ability to respond will be strong enough to address these problems before they manifest fully, and it’ll be another Y2K. In either case, you can make yourself a more difficult target. Turn on automatic updates for your phone, computer, browser, and apps. Don’t click on suspicious links or emails. Never reuse passwords, and store them securely in a password manager like 1Password. Use two-factor authentication with your accounts, and use an authenticator app like Duo Mobile rather than your phone number. Add a port-out pin with your mobile carrier so they won’t transfer your phone number to an attacker’s SIM card. Set up a family safe word or phrase to avoid voice scams over the phone, and turn off voice authentication at your bank or mobile carrier. If you really want to be secure, use a Yubikey, a physical hardware authentication device, instead of a password. One worrying sign for the future: If this is how AI makes impacts in the real world — first by silently climbing benchmarks while the real world stays exactly the same, then by crossing some critical threshold that causes real-world impacts to go vertical — it really doesn’t bode well for society’s ability to respond to much larger future problems like biorisk, unemployment, or loss of control. Written by @theojaffee

Recursive CEO @RichardSocher explains why the biggest breakthrough in the Transformer paper wasn't inventing attention: It was eliminating recurrent neural network layers. "People underestimate the crazy complex combinatorial space of already existing ideas." "If you combine all the concepts of physics, chemistry, biology, computer science, complexity theory, operating systems, there’s a lot you can already play around with. Similar to chess, you have to build an intuition of which of these idea combinations is the most viable." "The title of the paper is Attention Is All You Need. Attention was not invented in the transformer paper. The big insight was you don’t need any recurrent neural network layer. Sometimes even deleting an idea is novelty in and of itself." "I have no doubt, and we’re seeing already, that AI is getting better and better at ideating." @Recursive_SI