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Here’s why Microsoft supports open-source Chinese AI
In the battle over whether the US or China will lead the world in AI, the argument for the US side largely can be summed up in four words: USA good, China bad.
In this worldview espoused by big US AI companies, the Trump administration, and many Republican members of Congress, AI born and bred in China is portrayed as a grave security risk. The Chinese government, they claim, will use Chinese AI models to steal information from businesses, individuals, and government agencies. They also claim that because Chinese AI complies with Chinese censorship rules, US companies that use these models will be forced to comply with the rules as well.
Critics also say that if US AI is overtaken by Chinese AI, the US economy could be dealt a crushing blow, because the hundreds of billion dollars being invested by US AI companies will go down the tubes.
Because of this, Big AI firms Anthropic and OpenAI are lobbying to ban Chinese open-source AI from the US.
Not all AI companies and their customers agree with a ban. Microsoft, Meta, and AI chip maker Nvidia, among others, say there’s room for both US AI models and Chinese open-source models.
What’s the fight really about? To understand, let’s first dig into the tech behind most Chinese AI.
What’s the fuss about?The fight is primarily over what’s called lightweight open-source AI. “Lightweight” means the AI models don’t require multibillion-dollar data centers to train, build, and run them. They need comparatively modest processing power.
That’s attractive for businesses, because lightweight models are less expensive to license and run than much American AI tech, notably OpenAI’s ChatGPT and Anthropic’s Claude.
The other draw for businesses is that Chinese open-source AI tech can be used for free. And perhaps more important that is that the AI is typically what’s called “open weight,” which means businesses can tweak the technology for their own purposes.
When a traditional American AI model is trained, people who train it must decide how much “weight” to give to every parameter in every element of training data. For example, if AI were being trained to tell the difference between an apple and an orange, a great deal of weight would be put on the color of the fruit and the appearance of its skin. Less weight would be put on the fruit’s shape or size.
When a company buys American AI, they don’t know how much weight is given to each training parameter. They don’t even know what the parameters are. In open-weight AI, though, businesses have access to those parameters — and they can assign their own weights to them. This means they can customize the AI more easily for their particular needs in ways they can’t with traditional American AI models.
(Note that the terms open weight and open source are often used interchangeably when talking about AI, although technically they differ. Some open-weight models withhold some information such as their source code and training data — information that should be made public for a model to be considered truly open source.)
What Microsoft says about the Chinese modelsMicrosoft, Nvidia, Google, Meta, and many smaller companies don’t agree that Chinese lightweight open-source AI should be banned. They claim that security and censorship issues can be easily solved. And they believe use of the models will help the United States economically, not hurt it.
Microsoft CEO Satya Nadella posted on X: “Open-weight models are essential to a healthy AI ecosystem.” He added that the models will “strengthen American competitiveness and expand economic opportunity, while protecting national security.”
Microsoft was also one of more than 200 corporate signers of a document outlining all the reasons they believe open-weight AI is important.
Microsoft isn’t just talking about the importance of using Chinese lightweight open-source AI — it’s begun offering it to its customers and is looking to expand it even more. Right now, DeepSeek, the first Chinese lightweight open-source model to make its way to the US, is available via Azure. And Microsoft is testing offering DeepSeek to customers of its Copilot Cowork agentic AI product.
Keep in mind that Microsoft’s embrace of Chinese lightweight open-source AI has less to do with virtuous thinking than with profit-making. Offering these products to its customers will please both old and new customers because of the tech’s benefits. The more Microsoft offers to its customers, the more money it will make.
What happens next?It’s unclear what happens next with the Chinese AI products. OpenAI and Anthropic are allied with the Trump administration in wanting them blocked or limited in the US.
Still, there’s an increasing groundswell backing back their use. Bill Gurley, a Silicon Valley venture capitalist, told the New York Times: “You have two factions fighting over this issue. There’s the people who want OpenAI and Anthropic to own everything, and then there’s everybody else, including customers.”
My bet is that in short term, OpenAI and Anthropic will get what they want, because Trump has got their back. But after Trump leaves office, don’t be surprised if Chinese open-source AI has its day in the sun, backed by Microsoft.
Umělá inteligence dobývá české školy. Učitelům šetří čas, chybí ale jasná pravidla
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NightEagle targets Russian companies
Over the past year, our Global Emergency Response Team (GERT) has investigated several incidents involving the NightEagle group (also tracked as APT-Q-95). This group has been active since at least 2023 and originally focused on organizations in Asia. We have now identified attacks by the group targeting businesses in Russia. This post examines both known and new tools NightEagle used in its latest campaign.
Initial accessIn most incidents, the attackers used compromised valid credentials to gain access to corporate VPNs. VPN connections originated from IP addresses in the Russian segment linked to Cloudflare WARP tunnels, as well as from IP addresses associated with European virtual infrastructure providers.
GhostContainer on Microsoft ExchangeBoth during the initial access stage and as the attack progressed, the attackers deployed the GhostContainer backdoor on Microsoft Exchange servers. It incorporates components from several open-source projects, including the Neo-reGeorg tunnel, an exploit for the CVE-2020-0688 vulnerability, and the GhostWebShell class from the ysoserial utility. All of these components are publicly available on GitHub.
We were unable to determine the exact method the attackers used to deliver the backdoor to Microsoft Exchange servers. We believe with a high degree of confidence that they applied a technique already familiar to us: extracting the cryptographic keys used by Microsoft Exchange from the ASP.NET configuration, overwriting the VIEWSTATE framework parameter, and injecting a payload into it, which then launched the GhostContainer backdoor in memory.
The backdoor is a .NET assembly containing three classes that implement its core functionality:
- Stub: processes C2 commands delivered to the infected system through the x-owa-urlpostdata headers and evades detection by the Antimalware Scan Interface (AMSI) and Windows Event Log mechanisms by overwriting addresses in amsi.dll and ntdll.dll.
- App_Web_843e75cf5b63: accepts the fakePath and fakePageName parameters and creates virtual paths that redirect requests to the App_Web_8c9b251fb5b3 class.
- App_Web_8c9b251fb5b3: implements network traffic redirection (proxying) and socket forwarding functionality.
Kaspersky products detect the GhostContainer backdoor as Trojan.MSIL.GhostContainer.gen.
GhostContainer samples identified by the Similarity technology from Kaspersky Threat Analysis
Traffic redirectionOnce the attackers gain sufficient privileges during an attack, they leverage RDP to move laterally within the internal network segment. To do this, they download and run tools for tunneling and redirecting network traffic.
The attackers used GitHub repositories to host their archived tools. The names of the repositories and archives were disguised to look legitimate:
- https://github[.]com/mirror-js/mirror-js/refs/heads/main/js/js-webpack.zip
- https://github[.]com/mirror-js/mirror-js/refs/heads/main/js/jsonp-pack.zip
- https://github[.]com/browserthemes/resourcepack/releases/download/main/resource-pack.zip
One of the repositories used for storing network tools
The files contained within the archives were also given names mimicking known legitimate software, though unrelated to the archive names:
- adobe_32.exe;
- AdobeSync.exe;
- trueconf.exe;
- 1cbroker.exe;
- 1c-office-plugin.exe;
- trueconf-broker.exe.
Across the incidents we investigated, we found two tools that the attackers combined for traffic tunneling.
- Microsoft dev tunnels
This is a legitimate Microsoft mechanism that allows local web services to be published for internet access on *.*.devtunnels.ms domains. The attackers used this tunneling capability to expose port 3389 (RDP) on the compromised system.Execution graph of adobe_32.exe in Kaspersky Research Sandbox
- rdp2tcp
This is a publicly available tool for tunneling TCP traffic over an established RDP connection. It includes a server component that runs on the target system and a client component that runs on the attacker’s side.When virtual channels are opened and closed, corresponding events with IDs 132 (channel opened) and 148 (channel closed) are logged in the Microsoft-Windows-RemoteDesktopServices-RdpCoreTS/Operational.evtx Windows log. These events contain the names of the channels (such as XPSRD, cliprdr, Microsoft::Windows::RDS::DisplayControl, and others) used by the RemoteFX module, which extends the capabilities of the RDP protocol.
When the rdp2tcp tool is used, events with IDs 132 and 148 will contain the channel name rdp2tcp or other random alphanumeric combinations chosen by the attackers.
Creation event for a channel named rdp2tcp (server component startup)
The combination of Microsoft dev tunnels and rdp2tcp allows the attackers to maintain network access by using legitimate services without opening additional suspicious ports.
The attackers also used the atexec utility from the Impacket toolkit to create scheduled tasks on target systems. These tasks enabled network port forwarding through standard Windows functionality:
netsh interface portproxy add v4tov4 listenport=443 connectaddress=10.0.12.101 connectport=445 Lateral movementTo obtain elevated privileges and move laterally through the network, NightEagle exploited various vulnerabilities in Active Directory. The attackers used previously established tunnels to connect to internal infrastructure systems.
In one incident, they exploited a well-known RDP implementation vulnerability, CVE-2019-0708 (BlueKeep). They used the vulnerable mechanism to create a local account on the system and add it to the Administrators and Remote Desktop Users groups.
Contents of a system memory dump showing artifacts of the CVE-2019-0708 exploit
The attackers also requested Kerberos tickets with a non-standard combination of flags (Forwardable, Proxiable, Renewable) and attempted to replicate the Domain-Password object from the Active Directory database to impersonate the domain controller (a technique known as DCSync) after obtaining an account with sufficient privileges.
Through these methods, the attackers establish persistence in the infrastructure, obtain password hashes for domain accounts, use long-lived Kerberos tickets to gain legitimate access to target resources, and ultimately compromise domain controllers and the victim’s entire Active Directory infrastructure.
TakeawaysTo expand the geographic scope of its targets, NightEagle is updating its methods and adopting new techniques for persistence and lateral movement. Despite the group’s efforts to stay hidden, timely detection of anomalies combined with a comprehensive approach to infrastructure protection can significantly hinder the attackers from achieving their goals. Since the attackers rely on known legitimate tools and infrastructure vulnerabilities, well-configured monitoring can help detect NightEagle’s presence on the network.
Detection by Kaspersky solutionsKaspersky solutions reliably identify the malicious activity described above at various stages of the attack. We showed examples above of how Kaspersky Threat Analysis detects samples of the GhostContainer backdoor and the tunneling utility. This toolkit also includes the analytical solution Kaspersky Threat Attribution Engine (KTAE), which helps SOC analysts and incident responders determine which APT groups malware can be attributed to. The solution uses a proprietary comparison method that measures the similarity between analyzed samples of suspicious files and known malicious samples in Kaspersky’s collection.
The backdoor we discovered showed similarity to previously analyzed GhostContainer samples and a connection to the NightEagle APT group:
Backdoor analysis with KTAE
However, detection scenarios for this kind of attacks are not limited to file analysis. Deploying a backdoor on a target host produces numerous characteristic artifacts, which allow Kaspersky Endpoint Detection and Response Expert to alert users to anomalies in the infrastructure in a timely manner.
This malicious activity is detected by the following rules, available in the repository:
- Initial detection of the malicious signature occurs through the generic_ransomware_related_detection rule, based on EPP module events
- Detection of a malicious DLL’s .NET assembly being loaded via PowerShell: suspicious_assembly_loading_into_powershell_via_reflection
- Activity of tunneling and traffic redirection tools: detection_of_access_to_tunnel_domains_dns
- Use of tools from the Impacket toolkit, such as atexec:
- impacket_possible_activity
- attempt_to_download_hacktool_or_risktool_by_non_browser
- credentials_dumping_tools_file_artifacts_creation
- Attempts to replicate an Active Directory database object to impersonate a domain controller: potential_dcsync_via_startupparameters
Process tree in KEDR Expert
Kaspersky Anti Targeted Attack (KATA) detects this malicious activity in network traffic. For example, the Exploit.CVE-2019-0708.TCP.C&C signature allows detecting attempts to exploit the CVE-2019-0708 (BlueKeep) vulnerability.
Alert card for the BlueKeep vulnerability exploitation
Beyond this activity, KATA also detects other NightEagle actions in network traffic, such as the following:
- Traffic redirection and tunneling variations
- Attacks on Active Directory (DCSync, attempts to compromise AD CS, and others)
- Lateral movement across the network
631fb131a56caf4ca0f287ed73e876ab App_Web_Container_1.dll 4aa9fb1bf9223dfcdac920759bc7a3c7 1c-office-plugin.exe, 1cbroker.exe, trueconf.exe https://github[.]com/mirror-js/mirror-js https://github[.]com/browserthemes/resourcepack
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