China's Cyber Espionage Bonanza: Microsoft's Messy Code, Sneaky Hackers, and a DOD Wakeup Call

This is your Cyber Sentinel: Beijing Watch podcast.

Ting here, bringing you your weekly Cyber Sentinel: Beijing Watch—strap in, friends, because the digital frontlines were buzzing louder than a Beijing night market during Golden Week. Just as you’re settling in for your favorite byte-sized updates, we’re hit with the revelation that for over a decade, China might’ve had sneaky access to sensitive U.S. military systems—all courtesy of a combo platter of opaque Microsoft processes and under-supervised code flows. No, not an action movie—think of Microsoft engineers in mainland China, working on code that, thanks to some undertrained “digital escorts” in the Defense Department, ended up running in active DOD environments. The Foundation for Defense of Democracies revealed just how little oversight those “escorts” really had, and Secretary Pete Hegseth practically hit the red button: China’s out of DOD cloud, immediate reviews ordered, and not a minute too soon after ProPublica’s whistleblowing exposé.

But if you thought that was the only plot twist, Microsoft servers are turning into a cyber-Grand Central. Chinese hacking groups Linen Typhoon and Violet Typhoon (seriously, who’s naming these—Marvel?), plus a rising player codenamed Storm-2603, have been exploiting vulnerabilities in on-premises SharePoint—one of Microsoft’s most entrenched enterprise backbones. Dutch startup Eye Security flagged it, and Microsoft scrambled to patch, but not before over 400 orgs, including the US nuclear weapons agency, had incidents. And before you toss your office keycard into the Potomac, cloud-based SharePoint in Microsoft 365 is still safe, but for agencies and firms running those legacy on-prem systems, it’s DEFCON 2 for patching.

Where is China aiming? Early targets: government, schools, healthcare, and big enterprises on both sides of the Atlantic. Attribution: very firmly pinned on Beijing, with Microsoft providing technical fingerprints, active timezones matching China, and a not-so-subtle pattern of IP-theft and espionage. Even more bold—some of these attack kits are now floating on public websites, courtesy of threat actor playgrounds.

But the cyber kung-fu didn’t stop there! Researchers tracked Fire Ant, a persistent Chinese espionage group, targeting VMware infrastructure. Their approach isn’t noisy—think ninja over brute force. Leveraging stealthy, multilayered chains, they get into restricted networks, then sit and wait. Fire Ant uses tactics like infrastructure-centric persistence, evading basic endpoint security and focusing on critical blindspots. The similarities between Fire Ant and known Chinese APTs like UNC3886 are uncanny—same tools, same operational tempo, even Chinese keyboard slip-ups in the logs.

This week’s global response has been part scramble, part fire drill: US and UK agencies put out urgent calls for patching, reminded everyone ransomware isn’t going away, and reinforced that paying criminals just emboldens the next wave. Secretary Hegseth made the point crystal clear: foreign engineers should never, ever be maintaining DOD or even “sensitive-but-unclassified” government cloud systems. Period.

So what’s my pro tip, besides buying more coffee? Organizations need to aggressively patch, segment networks, audit the software supply chain—especially outside contractors—and kick legacy on-prem stuff to the curb. Strategically, the message is simple: China’s not just after data, they’re after strategic access and long-term leverage. Eyes on the cloud, people—literally.

Thanks for tuning in to Cyber Sentinel: Beijing Watch—hit that subscribe button, stay alert, and don’t let the Typhoons catch you napping. This has been a quiet please production, for more check out quiet please dot ai.

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