Cyber Smackdown: Senate Slams Pentagon, China's AI Sneak Attack, and Qilin's Global Rampage

This is your Digital Dragon Watch: Weekly China Cyber Alert podcast.

Hey listeners, Ting here with the latest Digital Dragon Watch: Weekly China Cyber Alert, coming to you right in the heat of July 2025. Trust me, the dragons have not been sleeping.

The headline this week, no surprise, is the U.S. Senate Armed Services Committee firing a shot across the bow at the Pentagon. They’re demanding a fresh cyber deterrence strategy, after recent attacks from Chinese groups like Volt Typhoon and Salt Typhoon have shown just how vulnerable American critical infrastructure really is. These names are like the Marvel villains of cyberspace, except far less fun at parties. Volt Typhoon has been sneaking into U.S. utilities using so-called “living off the land” techniques—basically using legitimate tools already inside the system to mask malicious activity. Their focus? Critical national defense infrastructure, especially in spots like Guam, which has become Beijing’s favorite proving ground for what experts are calling one of the most brazen cyber espionage campaigns ever against the U.S.

But don’t think Salt Typhoon has been on summer vacation. They’re busy burrowing into telecom networks and corporate systems, with a big side of espionage. This year, American officials have publicly admitted deterrence isn’t working—the digital wolves are still at the door, and sometimes in the living room. That’s why Senate is pushing for a full-spectrum deterrence strategy, possibly including both defensive and offensive cyber tools, to make adversaries actually think twice before poking around defense networks.

Speaking of poking around, the private sector is sweating over Congress dragging its feet on renewing the Cybersecurity Information Sharing Act of 2015. This law basically lets companies share threat data with the feds without getting sued six ways from Sunday. With expiration looming in September and only 35 workdays left for Congress, threat-sharing might take a nosedive just as AI-powered phishing and Chinese ransomware gangs step up their game. Annie Fixler of the Foundation for Defense of Democracies is practically waving flares: lose this law, and good luck mapping attack patterns or keeping companies from hiding incidents under the rug.

Across the Atlantic, the Czech government just issued a red-alert warning about DeepSeek, a Chinese AI company. Their National Cyber and Information Security Agency now bans DeepSeek products from all public sector systems, citing grave risks of state access and data de-anonymization. The warning especially targets critical infrastructure after a recent breach—allegedly courtesy of Chinese APT31 hackers—at the Czech Foreign Ministry. Anyone with a government job in Prague just got a new rule: don’t trust DeepSeek, don’t use DeepSeek. Even private citizens are being told, “If you care about your secrets, steer clear.”

Meanwhile, Qilin ransomware is on the rise, exploiting Fortinet vulnerabilities in FortiGate and FortiProxy. Yes, these bugs were patched months ago, but thousands of boxes are still exposed. Qilin isn’t picky about targets or geography—it’s a global smash-and-grab, and zero-day buyers are loving it.

So what should you do? The experts—like Pentagon nominee Justin Overbaugh and cyber think tanks—are calling for rapid adoption of zero trust architecture, beefed-up human intelligence, and aggressive, government-backed offensive cyber operations. Keep your Fortinet devices patched, double down on network monitoring, and if you manage critical infrastructure—especially ports, military systems, or utilities—review who and what has access. And if Congress is listening, it’s time to renew that threat-sharing law, stat.

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