SAN FRANCISCO / LONDON (IT BOLTWISE) – A San Francisco startup called Factory has successfully fended off a cyberattack from government-backed groups. These attempted to hijack the company’s software development platform for global fraud operations. The attackers used AI-based coding agents to maintain the infrastructure and make real-time adjustments to Factory’s cyber defenses.
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A notable incident in the world of cybersecurity recently occurred when San Francisco-based startup Factory fended off an attack emanating from at least one state-backed threat group. This group attempted to hijack Factory’s software development platform to use it in a global cyber fraud operation. The attackers, some of which are linked to Chinese state actors, used AI-based coding agents to maintain their infrastructure and make real-time adjustments to Factory’s cyber defenses.
The attack aimed to chain the use of multiple AI products and resell access as part of a larger operation. According to Factory CTO Eno Reyes, the attackers attempted to exploit free access and onboarding paths at multiple AI providers, including Factory, to put together an external, large-scale fraud and cybercrime operation. A significant portion of the volume came from data centers and Internet service providers in China, Russia and Southeast Asia.
The attack was first discovered on October 11 and lasted for several days. During the investigation, the company found that thousands of organizations were using its Droid product in unusual ways. Telegram channels were also discovered that advertised free or discounted access to premium AI coding assistants. Threat actors also provided access to vulnerability research on third-party targets and provided cybercrime resources.
The incident coincided with a disclosure by Anthropic regarding a sophisticated espionage campaign based on AI infrastructure. Factory has shared its findings with relevant safety authorities and regulators. James Plouffe, principal analyst at Forrester, told Cybersecurity Dive that the Factory incident and the attacks on Anthropic may underscore two goals of the attackers: demonstrating a viable concept for AI-driven attack infrastructures and benchmarking them against their own capabilities.
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