Critical infrastructure

Cybersecurity sector sees busy July for mergers

July witnessed a significant surge in cybersecurity mergers and acquisitions (M&A), spearheaded by Palo Alto Networks’ announcement of its definitive agreement to acquire identity security firm CyberArk for an estimated $25 billion.

The transaction, set to be the second-largest cybersecurity acquisition on record, signals Palo Alto’s strategic entry into identity security.

Beyond this significant deal, Palo Alto Networks also completed its purchase of AI security specialist Protect AI. The month saw widespread activity across the sector, including LevelBlue’s acquisition of Trustwave to create the industry’s largest pureplay managed security services provider.

Zurich Insurance Group, Signicat, Limerston Capital, Darktrace, Orange Cyberdefense, SecurityBridge, Commvault, and Axonius all announced or finalised strategic cybersecurity acquisitions.

The deals highlight a strong market focus on AI security, identity management, and expanding service capabilities across various regions.

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China says the US used a Microsoft server vulnerability to launch cyberattacks

China has accused the US of exploiting long-known vulnerabilities in Microsoft Exchange servers to launch cyberattacks on its defence sector, escalating tensions in the ongoing digital arms race between the two superpowers.

In a statement released on Friday, the Cyber Security Association of China claimed that US hackers compromised servers belonging to a significant Chinese military contractor, allegedly maintaining access for nearly a year.

The group did not disclose the name of the affected company.

The accusation is a sharp counterpunch to long-standing US claims that Beijing has orchestrated repeated cyber intrusions using the same Microsoft software. In 2021, Microsoft attributed a wide-scale hack affecting tens of thousands of Exchange servers to Chinese threat actors.

Two years later, another incident compromised the email accounts of senior US officials, prompting a federal review that criticised Microsoft for what it called a ‘cascade of security failures.’

Microsoft, based in Redmond, Washington, has recently disclosed additional intrusions by China-backed groups, including attacks exploiting flaws in its SharePoint platform.

Jon Clay of Trend Micro commented on the tit-for-tat cyber blame game: ‘Every nation carries out offensive cybersecurity operations. Given the latest SharePoint disclosure, this may be China’s way of retaliating publicly.’

Cybersecurity researchers note that Beijing has recently increased its use of public attribution as a geopolitical tactic. Ben Read of Wiz.io pointed out that China now uses cyber accusations to pressure Taiwan and shape global narratives around cybersecurity.

In April, China accused US National Security Agency (NSA) employees of hacking into the Asian Winter Games in Harbin, targeting personal data of athletes and organisers.

While the US frequently names alleged Chinese hackers and pursues legal action against them, China has historically avoided levelling public allegations against American intelligence agencies, until now.

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China’s Silk Typhoon hackers filed patents for advanced spyware tools

A Chinese state-backed hacking group known as Silk Typhoon has filed more than ten patents for intrusive cyberespionage tools, shedding light on its operations’ vast scope and sophistication.

These patents, registered by firms linked to China’s Ministry of State Security, detail covert data collection software far exceeding the group’s previously known attack methods.

The revelations surfaced following a July 2025 US Department of Justice indictment against two alleged members of Silk Typhoon, Xu Zewei and Zhang Yu.

Both are associated with companies tied to the Shanghai State Security Bureau and connected to the Hafnium group, which Microsoft rebranded as Silk Typhoon in 2022.

Instead of targeting only Windows environments, the patent filings reveal a sweeping set of surveillance tools designed for Apple devices, routers, mobile phones, and even smart home appliances.

Submissions include software for bypassing FileVault encryption, extracting remote cellphone data, decrypting hard drives, and analysing smart devices. Analysts from SentinelLabs suggest these filings offer an unprecedented glimpse into the architecture of China’s cyberwarfare ecosystem.

Silk Typhoon gained global attention in 2021 with its Microsoft Exchange ProxyLogon campaign, which prompted a rare coordinated condemnation by the US, UK, and EU. The newly revealed capabilities show the group’s operations are far more advanced and diversified than previously believed.

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OpenAI and Nscale to build an AI super hub in Norway

OpenAI has revealed its first European data centre project in partnership with British startup Nscale, selecting Norway as the location for what is being called ‘Stargate Norway’.

The initiative mirrors the company’s ambitious $500 billion US ‘Stargate’ infrastructure plan and reflects Europe’s growing demand for large-scale AI computing capacity.

Nscale will lead the development of a $1 billion AI gigafactory in Norway, with engineering firm Aker matching the investment. These advanced data centres are designed to meet the heavy processing requirements of cutting-edge AI models.

OpenAI expects the facility to deliver 230MW of computing power by the end of 2026, making it a significant strategic foothold for the company on the continent.

Sam Altman, CEO of OpenAI, stated that Europe needs significantly more computing to unlock AI’s full potential for researchers, startups, and developers. He said Stargate Norway will serve as a cornerstone for driving innovation and economic growth in the region.

Nscale confirmed that Norway’s AI ecosystem will receive priority access to the facility, while remaining capacity will be offered to users across the UK, Nordics and Northern Europe.

The data centre will support 100,000 of NVIDIA’s most advanced GPUs, with long-term plans to scale as demand grows.

The move follows broader European efforts to strengthen AI infrastructure, with the UK and France pushing for major regulatory and funding reforms.

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Scattered Spider cyberattacks set to intensify, warn FBI and CISA

The cybercriminal group known as Scattered Spider is expected to intensify its attacks in the coming weeks, according to a joint warning issued by the FBI, CISA, and cybersecurity agencies in Canada, the UK and Australia.

These warnings highlight the group’s increasingly sophisticated methods, including impersonating employees to bypass IT support and hijack multi-factor authentication processes.

Instead of relying on old techniques, the hackers now deploy stealthy tools like RattyRAT and DragonForce ransomware, particularly targeting VMware ESXi servers.

Their attacks combine social engineering with SIM swapping and phishing, enabling them to exfiltrate sensitive data before locking systems and demanding payment — a tactic known as double extortion.

Scattered Spider, also referred to as Okta Tempest, is reportedly creating fake online identities and infiltrating internal communication channels like Slack and Microsoft Teams. In some cases, they have even joined incident response calls to gain insight into how companies are reacting.

Security agencies urge organisations to adopt phishing-resistant multi-factor authentication, audit remote access software, monitor unusual logins and behaviours, and ensure offline encrypted backups are maintained.

More incidents are expected, as the group continues refining its strategies instead of slowing down.

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China demands Nvidia explain security flaws in H20 chips

China’s top internet regulator has summoned Nvidia to explain alleged security concerns linked to its H20 computing chips.

The Cyberspace Administration of China stated that the chips, which are sold domestically, may contain backdoor vulnerabilities that could pose risks to users and systems.

Instead of ignoring the issue, Nvidia has been asked to submit technical documents and provide a formal response addressing these potential flaws.

The chips are part of Nvidia’s tailored product line for the Chinese market following US export restrictions on advanced AI processors.

The investigation signals tighter scrutiny from Chinese authorities on foreign technology amid ongoing geopolitical tensions and a global race for semiconductor dominance.

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Australian companies unite cybersecurity defences to combat AI threats

Australian companies are increasingly adopting unified, cloud-based cybersecurity systems as AI reshapes both threats and defences.

A new report from global research firm ISG reveals that many enterprises are shifting away from fragmented, uncoordinated tools and instead opting for centralised platforms that can better detect and counter sophisticated AI-driven attacks.

The rapid rise of generative AI has introduced new risks, including deepfakes, voice cloning and misinformation campaigns targeting elections and public health.

In response, organisations are reinforcing identity protections and integrating AI into their security operations to improve both speed and efficiency. These tools also help offset a growing shortage of cybersecurity professionals.

After a rushed move to the cloud during the pandemic, many businesses retained outdated perimeter-focused security systems. Now, firms are switching to cloud-first strategies that target vulnerabilities at endpoints and prevent misconfigurations instead of relying on legacy solutions.

By reducing overlap in systems like identity management and threat detection, businesses are streamlining defences for better resilience.

ISG also notes a shift in how companies choose cybersecurity providers. Firms like IBM, PwC, Deloitte and Accenture are seen as leaders in the Australian market, while companies such as TCS and AC3 have been flagged as rising stars.

The report further highlights growing demands for compliance and data retention, signalling a broader national effort to enhance cyber readiness across industries.

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White House launches AI Action Plan with Executive Orders on exports and regulation

The White House has unveiled a sweeping AI strategy through its new publication Winning the Race: America’s AI Action Plan.

Released alongside three Executive Orders, the plan outlines the federal government’s next phase in shaping AI policy, focusing on innovation, infrastructure, and global leadership.

The AI Action Plan centres on three key pillars: accelerating AI development, establishing national AI infrastructure, and promoting American AI standards globally. Four consistent themes run through each pillar: regulation and deregulation, investment, research and standardisation, and cybersecurity.

Notably, deregulation is central to the plan’s strategy, particularly in reducing barriers to AI growth and speeding up infrastructure approval for data centres and grid expansion.

Investment plays a dominant role. Federal funds will support AI job training, data access, lab automation, and domestic component manufacturing, instead of relying on foreign suppliers.

Alongside, the plan calls for new national standards, improved dataset quality, and stronger evaluation mechanisms for AI interpretability, control, and safety. A dedicated AI Workforce Research Hub is also proposed.

In parallel, three Executive Orders were issued. One bans ‘woke’ or ideologically biased AI tools in federal use, another fast-tracks data centre development using federal land and brownfield sites, and a third launches an AI exports programme to support full-stack US AI systems globally.

While these moves open new opportunities, they also raise questions around regulation, bias, and the future shape of AI development in the US.

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NATO highlights cyber vulnerabilities in European ports

A recent policy brief from NATO’s Cooperative Cyber Defence Centre of Excellence (CCDCOE) indicates that Europe’s civilian ports, which handle approximately 80% of international trade and support NATO logistics, are increasingly targeted by cyberattacks linked to state-affiliated actors. The report identifies a rise in disruptions affecting port access control systems and vessel traffic management across various countries, with suspected involvement from groups associated with Russia, Iran, and China.

The document notes that NATO’s current maritime strategy lacks formal mechanisms to engage with commercial port operators, who manage critical infrastructure exposed to cyber threats. It calls for updated strategic frameworks to improve coordination between civil and military sectors, and to enhance cybersecurity and resilience across digital, operational, and energy systems in ports.

The brief outlines common attack methods, such as denial-of-service, phishing, ransomware, and malware, which have affected numerous maritime organisations in 2024.

Key recommendations include:

  • Updating NATO’s 2011 maritime strategy to integrate cybersecurity and establish engagement channels with commercial port operators.
  • Establishing sector-specific intelligence-sharing frameworks to support timely incident response.
  • Developing coordinated public–private action plans and resilience measures at both national and alliance levels.

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Italy investigates Meta over AI integration in WhatsApp

Italy’s antitrust watchdog has investigated Meta Platforms over allegations that the company may have abused its dominant position by integrating its AI assistant directly into WhatsApp.

The Rome-based authority, formally known as the Autorità Garante della Concorrenza e del Mercato (AGCM), announced the probe on Wednesday, stating that Meta may have breached European Union competition regulations.

The regulator claims that the introduction of the Meta AI assistant into WhatsApp was carried out without obtaining prior user consent, potentially distorting market competition.

Meta AI, the company’s virtual assistant designed to provide chatbot-style responses and other generative AI functions, has been embedded in WhatsApp since March 2025. It is accessible through the app’s search bar and is intended to offer users conversational AI services directly within the messaging interface.

The AGCM is concerned that this integration may unfairly favour Meta’s AI services by leveraging the company’s dominant position in the messaging market. It warned that such a move could steer users toward Meta’s products, limit consumer choice, and disadvantage competing AI providers.

‘By pairing Meta AI with WhatsApp, Meta appears to be able to steer its user base into the new market not through merit-based competition, but by ‘forcing’ users to accept the availability of two distinct services,’ the authority said.

It argued that this strategy may undermine rival offerings and entrench Meta’s position across adjacent digital services. In a statement, Meta confirmed cooperating fully with the Italian authorities.

The company defended the rollout of its AI features, stating that their inclusion in WhatsApp aimed to improve the user experience. ‘Offering free access to our AI features in WhatsApp gives millions of Italians the choice to use AI in a place they already know, trust and understand,’ a Meta spokesperson said via email.

The company maintains its approach, which benefits users by making advanced technology widely available through familiar platforms. The AGCM clarified that its inquiry is conducted in close cooperation with the European Commission’s relevant offices.

The cross-border collaboration reflects the growing scrutiny Meta faces from regulators across the EU over its market practices and the use of its extensive user base to promote new services.

If the authority finds Meta in breach of EU competition law, the company could face a fine of up to 10 percent of its global annual turnover. Under Article 102 of the Treaty on the Functioning of the European Union, abusing a dominant market position is prohibited, particularly if it affects trade between member states or restricts competition.

To gather evidence, AGCM officials inspected the premises of Meta’s Italian subsidiary, accompanied by Guardia di Finanza, the tax police’s special antitrust unit in Italy.

The inspections were part of preliminary investigative steps to assess the impact of Meta AI’s deployment within WhatsApp. Regulators fear that embedding AI assistants into dominant platforms could lead to unfair advantages in emerging AI markets.

By relying on its established user base and platform integration, Meta may effectively foreclose competition by making alternative AI services harder to access or less visible to consumers. Such a case would not be the first time Meta has faced regulatory scrutiny in Europe.

The company has been the subject of multiple investigations across the EU concerning data protection, content moderation, advertising practices, and market dominance. The current probe adds to a growing list of regulatory pressures facing the tech giant as it expands its AI capabilities.

The AGCM’s investigation comes amid broader EU efforts to ensure fair competition in digital markets. With the Digital Markets Act and AI Act emerging, regulators are becoming more proactive in addressing potential risks associated with integrating advanced technologies into consumer platforms.

As the investigation continues, Meta’s use of AI within WhatsApp will remain under close watch. The outcome could set an essential precedent for how dominant tech firms can release AI products within widely used communication tools.

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