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12 Feb 2026, 17:20

Google says its AI chatbot Gemini is facing large-scale “distillation attacks”

Google’s AI chatbot Gemini has become the target of a large-scale information heist, with attackers hammering the system with questions to copy how it works. One operation alone sent more than 100,000 queries to the chatbot, trying to pull out the secret patterns that make it smart. The company reported Thursday that these so-called “distillation attacks” are getting worse. Bad actors send wave after wave of questions to figure out the logic behind Gemini’s responses. Their goal is simple: steal Google’s technology to build or improve their own AI systems without spending billions on development. Google believes most attackers are private businesses or researchers looking to get ahead without doing the hard work. The attacks came from around the world, according to the company’s report . John Hultquist, who leads Google’s Threat Intelligence Group, said smaller companies using custom AI tools will likely face similar attacks soon. Tech firms have thrown billions of dollars at building their AI chatbots. The inner workings of these systems are treated like crown jewels. Even with defenses in place to catch these attacks, major AI systems remain easy targets because anyone with internet access can talk to them. Last year, OpenAI pointed fingers at Chinese company DeepSeek, claiming it used distillation to make its models better. Cryptopolitan reported on January 30 that Italy and Ireland banned DeepSeek after OpenAI accused the Chinese firm of using distillation to steal its AI models. The technique lets companies copy expensive technology at a fraction of the cost. Why are attackers doing this? The economics are brutal. Building a state-of-the-art AI model costs hundreds of millions or even billions of dollars. DeepSeek reportedly built its R1 model for around six million dollars using distillation, while ChatGPT-5’s development topped two billion dollars, according to industry reports. Stealing a model’s logic cuts that massive investment to almost nothing. Many of the attacks on Gemini targeted the algorithms that help it “reason” or process information, Google said. Companies that train their own AI systems on sensitive data – like 100 years of trading strategies or customer information – now face the same threat. “Let’s say your LLM has been trained on 100 years of secret thinking of the way you trade. Theoretically, you could distill some of that,” Hultquist explained. Nation-state hackers join the hunt The problem goes beyond money-hungry companies. APT31, a Chinese government hacking group hit with US sanctions in March 2024, used Gemini late last year to plan actual cyberattacks against American organizations. The group paired Gemini with Hexstrike, an open-source hacking tool that can run more than 150 security programs. They analyzed remote code execution flaws, ways to bypass web security, and SQL injection attacks – all aimed at specific US targets, according to Google’s report. Cryptopolitan covered similar AI security concerns previously, warning that hackers were exploiting AI vulnerabilities. The APT31 case shows those warnings were spot-on. Hultquist pointed to two major worries. Adversaries operating across entire intrusions with minimal human help, and automating the development of attack tools. “These are two ways where adversaries can get major advantages and move through the intrusion cycle with minimal human interference,” he said. The window between discovering a software weakness and getting a fix in place, called the patch gap, could widen dramatically. Organizations often take weeks to deploy defenses. With AI agents finding and testing vulnerabilities automatically, attackers could move much faster. “We are going to have to leverage the advantages of AI, and increasingly remove humans from the loop, so that we can respond at machine speed,” Hultquist told The Register. The financial stakes are enormous. IBM’s 2024 data breach report found that intellectual property theft now costs organizations $173 per record, with IP-focused breaches jumping 27% year-over-year. AI model weights represent the highest-value targets in this underground economy – a single stolen frontier model could fetch hundreds of millions on the black market. Google has shut down accounts linked to these campaigns, but the attacks keep coming from “throughout the globe,” Hultquist said. As AI becomes more powerful and more companies rely on it, expect this digital gold rush to intensify. The question isn’t whether more attacks will come, but whether defenders can keep up. If you're reading this, you’re already ahead. Stay there with our newsletter .

12 Feb 2026, 16:31

David Schwartz calls Bitcoin a “dead end” technologically

Fear has taken hold of the cryptocurrency market. Bitcoin is sitting near $67,000, well below where it stood late last year, and a closely watched sentiment tracker is flashing some of its most alarming readings on record. The Crypto Fear and Greed Index, which pulls together data from trading volumes, price swings, social media activity, market momentum, and Bitcoin’s share of the overall crypto market, has dropped to somewhere between 5 and 8 in recent days. Numbers that low are rare. The last time readings were this bleak was during some of the worst crashes the crypto market has ever seen. A crypto veteran calls Bitcoin a dead end While ordinary investors are running scared, a well-known figure in the blockchain world has added fuel to the fire with some sharp words about Bitcoin’s future. David Schwartz, who served as chief technology officer at Ripple and co-designed the XRP Ledger, said he has no interest in contributing to Bitcoin’s development. His reason? He thinks Bitcoin is basically a dead end from a technology standpoint. He drew a comparison to the regular US dollar, arguing that Bitcoin stays on top not because the people behind it are constantly improving the technology, but because people trust they’ll be able to hold onto it and move it around whenever they want. “For 99% of what makes Bitcoin interesting, all the blockchain needs to be able to do is allow people to rely on being able to hold and transfer Bitcoin in the future,” Schwartz wrote in posts on X. Source: @JoelKatz He did leave some room for the idea that change might eventually be unavoidable. One scenario he pointed to was quantum computing. If Bitcoin doesn’t update its code to defend against that kind of threat, a process that would require a hard fork, meaning a significant and divisive change to the network, it could be in serious trouble. “I guess that will be at least one case where technological changes will be necessary, or Bitcoin will collapse,” he said. Schwartz’s comments land in familiar territory for anyone who has followed Bitcoin criticism over the years. Many skeptics have long argued that Bitcoin’s staying power comes from its brand, the size of its network, and speculative interest, not from any real technical progress. Coming from someone who built a rival system with a focus on speed and practical use, his words carry a certain weight. JPMorgan sees a steadier road ahead However, not everyone is gloomy. Over at JPMorgan, strategists are taking a more upbeat view of where crypto is headed for the rest of 2026 and beyond. A team led by analyst Nikolaos Panigirtzoglou put out a report stating that they expect money to start flowing back into digital assets. The difference this time around, they say, is that the push will come from big institutions rather than regular retail investors or companies building up Bitcoin reserves. That kind of money tends to be more steady, which could make for a less chaotic cycle than what markets have seen before. The JPMorgan team also highlighted something worth watching on the mining side. It now costs roughly $77,000 to produce one Bitcoin. Since the price is currently sitting below that level, the most expensive miners are under real pressure. If enough of them shut down, the network becomes easier to mine, costs drop, and the market finds a new floor, a kind of built-in correction that Bitcoin has gone through before. The analysts also noted that Bitcoin is holding its ground reasonably well compared to gold, even though gold has been outperforming lately. On the regulatory front, potential legislation like the Clarity Act could open the door for more institutional money to come in, which JPMorgan sees as a meaningful boost. So Bitcoin finds itself in a strange place right now. A respected technology builder says it has nowhere left to grow. Meanwhile, one of the biggest banks in the world says the sell-off may not last. The market sits somewhere in between, waiting to see which side turns out to be right. Join a premium crypto trading community free for 30 days - normally $100/mo.

12 Feb 2026, 16:14

Anthropic commits $20M to midterm races to defend state-level AI laws

The battle between artificial intelligence companies has jumped from the tech world straight into American politics. Anthropic announced Thursday it will pour $20 million into races this midterm election season. The money goes to Public First Action, a newly formed group that wants states to keep their power to write AI rules. That puts Anthropic on a collision course with both OpenAI’s political operation and the Trump White House, which wants Washington to take control of AI policy nationwide. “The companies building AI have a responsibility to help ensure the technology serves the public good, not just their own interests,” Anthropic said in Thursday’s announcement. The group is backing candidates who oppose efforts to strip states of their authority over AI technology. One early beneficiary is Marsha Blackburn, the Republican running for Tennessee governor, who fought against federal bills that would have blocked state legislatures from passing their own AI laws. Public First Action faces steep odds against Leading the Future, the opposing group backed by OpenAI president Greg Brockman and tech investor Marc Andreessen. That operation has collected $125 million since launching in August 2025. Andreessen’s venture firm A16Z holds a stake in OpenAI, making the funding fight even more personal between the rival AI developers. Trump’s December executive order escalates the battle President Trump signed an order in December that directly threatens the state laws Anthropic wants to protect. The directive tells federal agencies to build a national AI framework with minimal rules, then use it to override tougher state regulations. Trump’s order goes further by creating a Justice Department task force specifically designed to challenge state AI laws in court. States with rules Trump considers too strict could lose federal funding. His AI advisor, David Sacks, already singled out Colorado’s law as “probably the most excessive” one on the books. Several states have regulations taking effect or moving through legislatures in 2026. Colorado delayed its AI Act until June 30, 2026, after facing pressure, but the law will still require companies building “high-risk” AI systems to prevent discrimination in their algorithms. California passed seven AI laws in 2025, with its Transparency in Frontier AI Act starting January 1, 2026. Texas banned AI use for certain purposes through its Responsible AI Governance Act. Cryptopolitan previously reported that Anthropic raised $2 billion at a $60 billion valuation last year, followed by a massive $15 billion investment from Microsoft and Nvidia that pushed its worth to around $350 billion. Those investors now have billions riding on how AI gets regulated. Deep ideological split drives spending war The company’s blog post Thursday took a veiled shot at OpenAI without naming them directly, warning that “vast resources have flowed to political organizations that oppose” efforts to make AI safer. If candidates backed by Public First Action win enough seats, they could block federal preemption bills in Congress. That would keep the state-by-state approach alive, at least temporarily. The rivalry between Anthropic and OpenAI runs much deeper than just funding levels. Founded by siblings Dario and Daniela Amodei after they left OpenAI over safety concerns, Anthropic has built its entire identity around making AI technology less risky. OpenAI and its backers prefer lighter rules that let innovation move faster. That philosophical gap now plays out in campaign contributions and lobbying. OpenAI asked Trump to block state AI rules in exchange for government access to its models earlier this year. The company argued that fragmented state laws would damage America’s AI leadership. But the odds look tough. Leading the Future’s six-to-one funding advantage gives OpenAI’s side more money to spend on ads, staff, and ground operations. Trump’s executive order also hands federal agencies tools to challenge state laws immediately, without waiting for Congress. The fight reveals a deeper split in Silicon Valley over how much oversight AI should face. Companies like Anthropic, founded by former OpenAI employees who left over safety disagreements, generally favor stronger rules to prevent AI from causing harm. OpenAI and its supporters prefer lighter regulation that lets innovation move faster. Voters in states that passed AI laws will essentially get to choose which vision they prefer when they cast ballots this fall. Their decision could determine whether AI development happens under a patchwork of state rules or a uniform federal system with fewer restrictions. Get seen where it counts. Advertise in Cryptopolitan Research and reach crypto’s sharpest investors and builders.

12 Feb 2026, 15:37

Bitcoin already had a bear market back in 2022 – VanEck’s Sigel

More on Bitcoin USD Bitcoin's Plunge Isn't Even Close To Over Bitcoin: Shrinking Forced Liquidations Point To Price Recovery Bitcoin: Fundamental And Quantitative Analysis, Long-Term Potential Is Present Crypto downturn is a ‘crisis of faith in prices’ not of the technology – Wintermute’s Gaevoy Standard Chartered cuts 2026 bitcoin forecast to $100,000, sees near-term slide to $50,000

12 Feb 2026, 15:15

Crypto downturn is a ‘crisis of faith in prices’ not of the technology – Wintermute’s Gaevoy

More on Bitcoin Bitcoin's Plunge Isn't Even Close To Over Bitcoin: Shrinking Forced Liquidations Point To Price Recovery Bitcoin: Fundamental And Quantitative Analysis, Long-Term Potential Is Present Standard Chartered cuts 2026 bitcoin forecast to $100,000, sees near-term slide to $50,000 BlockFills withdrawal halt stirs memories of 2022 crypto bear market

12 Feb 2026, 14:59

Bitcoin Stabilises Near 67k as Software Stocks and Macro Headwinds Cap Recovery