Microsoft: Chinese Hackers Breached US Govt Email Accounts

FILE PHOTO: Microsoft logo is seen on a smartphone placed on displayed Activision Blizzard logo in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Microsoft logo is seen on a smartphone placed on displayed Activision Blizzard logo in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
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Microsoft: Chinese Hackers Breached US Govt Email Accounts

FILE PHOTO: Microsoft logo is seen on a smartphone placed on displayed Activision Blizzard logo in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Microsoft logo is seen on a smartphone placed on displayed Activision Blizzard logo in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

Chinese-based hackers seeking intelligence information breached the email accounts of a number of US government agencies, computer giant Microsoft said.

"The threat actor Microsoft links to this incident is an adversary based in China that Microsoft calls Storm-0558," the company said in a blog post late Tuesday.

Microsoft said Storm-0558 gained access to email accounts at approximately 25 organizations including government agencies, AFP said.

Microsoft did not identify the targets but a US State Department spokesperson said the department had "detected anomalous activity" and had taken "immediate steps to secure our systems."

"As a matter of cybersecurity policy, we do not discuss details of our response and the incident remains under investigation," the spokesperson said.

According to The Washington Post, the breached email accounts were unclassified and "Pentagon, intelligence community and military email accounts did not appear to be affected."

But the paper reported Wednesday evening, quoting US officials, that State Department email accounts and that of Commerce Secretary Gina Raimondo were hacked. Raimondo's agency has angered China by imposing tough export controls on Chinese technologies.

CNN, citing sources familiar with the investigation, said the Chinese hackers targeted a small number of federal agencies and the email accounts of specific officials at each agency.

In the blog post, Charlie Bell, a Microsoft executive vice president, said "we assess this adversary is focused on espionage, such as gaining access to email systems for intelligence collection.

"This type of espionage-motivated adversary seeks to abuse credentials and gain access to data residing in sensitive systems," Bell said.

US National Security Adviser Jake Sullivan addressed the hack in an appearance on Wednesday on ABC's Good Morning America, and said it had been detected "fairly rapidly."

"We were able to prevent further breaches," Sullivan said.

"The matter is still being investigated, so I have to leave it there because we're gathering further information in consultation with Microsoft and we will continue to apprise the public as we learn more," Sullivan said.

Espionage and data theft
Microsoft said Storm-0558 "primarily targets government agencies in Western Europe and focuses on espionage, data theft, and credential access."

The Redmond, Washington-based company said it had launched an investigation into "anomalous mail activity" on June 16.

"Over the next few weeks, our investigation revealed that beginning on May 15, 2023, Storm-0558 gained access to email accounts affecting approximately 25 organizations including government agencies as well as related consumer accounts.

"They did this by using forged authentication tokens to access user email using an acquired Microsoft account consumer signing key," the company said. "Microsoft has completed mitigation of this attack for all customers."

US Senator Mark Warner, chairman of the Senate Select Committee on Intelligence, said the panel is "closely monitoring what appears to be a significant cybersecurity breach by Chinese intelligence."

"It's clear that the PRC is steadily improving its cyber collection capabilities directed against the US and our allies," Warner said in a statement.

Disclosure of the Chinese hacking comes on the heels of trips to China by US Secretary of State Antony Blinken and Treasury Secretary Janet Yellen and the shooting down by the United States of a Chinese surveillance balloon.

In May, Microsoft said state-sponsored Chinese hackers called "Volt Typhoon" had infiltrated critical US infrastructure networks.

Microsoft highlighted Guam, a US territory in the Pacific Ocean with a vital military outpost, as one of the targets in that attack, but said "malicious" activity had also been detected elsewhere in the United States.

"Microsoft assesses with moderate confidence that this Volt Typhoon campaign is pursuing development of capabilities that could disrupt critical communications infrastructure between the United States and Asia region during future crises," the company said at the time.

Microsoft's May statement coincided with an advisory released by US, Australian, Canadian, New Zealand and British authorities warning that the hacking was likely occurring globally.

China denied the allegations, describing the Microsoft report as "extremely unprofessional" and "scissors-and-paste work."

"It is clear that this is a collective disinformation campaign of the Five Eyes coalition countries, initiated by the US for its geopolitical purposes," foreign ministry spokeswoman Mao Ning said, referring to the security alliance of the United States and its Western allies that wrote the report.



Apple’s Ternus Faces AI Test as Foldable iPhone Takes Center Stage

Apple's Senior Vice President Hardware Engineering John Ternus attends the premiere of season four of the Apple TV series "Ted Lasso" at the Academy Museum in Los Angeles, California, US, July 27, 2026. (Reuters)
Apple's Senior Vice President Hardware Engineering John Ternus attends the premiere of season four of the Apple TV series "Ted Lasso" at the Academy Museum in Los Angeles, California, US, July 27, 2026. (Reuters)
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Apple’s Ternus Faces AI Test as Foldable iPhone Takes Center Stage

Apple's Senior Vice President Hardware Engineering John Ternus attends the premiere of season four of the Apple TV series "Ted Lasso" at the Academy Museum in Los Angeles, California, US, July 27, 2026. (Reuters)
Apple's Senior Vice President Hardware Engineering John Ternus attends the premiere of season four of the Apple TV series "Ted Lasso" at the Academy Museum in Los Angeles, California, US, July 27, 2026. (Reuters)

When new CEO John Ternus unveils Apple's latest products on Wednesday, Wall Street expects him to show that the company can still deliver breakthrough hardware and a Siri virtual assistant capable of competing in the AI race.

Analysts expect Apple to announce at its Cupertino, California, headquarters a new iPhone that folds open like a passport. They said it could quickly emerge as the category leader in the nascent folding phone market, despite an expected price of more than $2,500 and having cameras and processors that may not lead the market.

The company has already announced a deep overhaul of Siri — in part by tapping Google's AI tech behind the scenes — and that may prove to be Ternus' first big success after years ‌of delays. A successful ‌revamp by the end of this year could give Apple a good chance ‌of ⁠pulling even with ⁠longtime rival Google's Gemini assistant, analysts said.

Investors have largely looked past Apple's slow start in generative AI because of the company's billion-plus device installed base and loyal customer base. Ternus now faces pressure to convince consumers that Apple's devices are the best way to use AI, which could determine whether he inherits former CEO Tim Cook's momentum or plays catch-up.

NEW PREMIUM IPHONES

Apple is expected to update its premium iPhone Pro and Pro Max devices but hold off on refreshing the iPhone Air and the base and budget lines until spring. The aim is to drive interest in the real ⁠star of this week's show, the folding phone.

"Even with a $2,500 price tag, the ‌Apple foldable is going to fly off the shelves, especially because ‌Apple is excellent at creating an aura of exclusivity, luxury, and scarcity," Nabila Popal, senior research director at IDC, told Reuters.

Popal expects the phone to generate more than $45 billion in revenue for Apple by the end of next ‌year, even as foldables overall remain a single-digit share of the phone market.

The main appeal of a folding phone is the sheer newness after nearly two decades of candybar-style phones.

While Samsung , Google and China's Huawei have sold folding phones since 2019, analysts expect Apple to benefit from entering late by solving key engineering challenges, such as a hinge that feels sturdy over ‌thousands of uses and minimizing any crease in the screen when the device is open.

"They've seen what has worked and what hasn't worked with their competitors," ⁠said Anshel Sag, an ⁠analyst at Moor Insights & Strategy who has tested many folding devices.

NEW SIRI'S BIG MOMENT

Ternus' key challenge will be persuading customers to adopt the new Siri and convincing them and third-party developers that Apple can keep pace with rivals such as OpenAI, which roll out big improvements every few weeks, while Apple has traditionally moved more slowly.

"If Siri still sucked, then he would have a much more difficult Wednesday," said Carolina Milanesi of Creative Strategies. "Now they can comfortably say Siri is delivering and has value, but they need to just continue to work and make it better and keep up."

Analysts say Ternus, who kept a low profile as hardware engineering chief for five years, is likely to focus on delivering powerful devices as a base to expand on-device AI.

But he faces a steep regulatory challenge, said Gene Munster of Deepwater Asset Management: Apple's Siri update might take until 2028 to win approval in China and won't initially be available in Europe due to a regulatory dispute.

"It matters a lot that they get the US out in time because it builds the confidence that they can do something in Europe," he said.


French AI Firm Mistral Valued at Over 21Bn Euros after Latest Funding

FILE PHOTO: An advertisement for Mistral AI, the French artificial intelligence company, is displayed inside the Grand Central subway station in New York City, US, May 21, 2026. REUTERS/Shannon Stapleton/File Photo
FILE PHOTO: An advertisement for Mistral AI, the French artificial intelligence company, is displayed inside the Grand Central subway station in New York City, US, May 21, 2026. REUTERS/Shannon Stapleton/File Photo
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French AI Firm Mistral Valued at Over 21Bn Euros after Latest Funding

FILE PHOTO: An advertisement for Mistral AI, the French artificial intelligence company, is displayed inside the Grand Central subway station in New York City, US, May 21, 2026. REUTERS/Shannon Stapleton/File Photo
FILE PHOTO: An advertisement for Mistral AI, the French artificial intelligence company, is displayed inside the Grand Central subway station in New York City, US, May 21, 2026. REUTERS/Shannon Stapleton/File Photo

Mistral said Tuesday it had raised three billion euros ($3.5 billion) in what it described as the largest-ever European tech equity fundraising, valuing the French AI firm at over 21 billion euros.

The startup, which is considered Europe's leading AI model developer and was valued at nearly 12 billion euros following the previous funding round, said new the funding would help expand its leading-edge research.

"This round means we can move faster on R&D, products, infrastructure and keep giving organizations the ability to run AI at scale, on their own terms," Mistral's chief executive and co-founder Arthur Mensch said in a statement.

The company emphasized it is focusing on so-called open-weight AI models that companies can run themselves with their own data.

"Organizations want to industrialize AI inside systems that are already complex: their own data, their own tools, their own compliance constraints," AFP quoted Mensch as saying.

"It's why we've built Mistral on open-weight frontier models and infrastructure that we control end to end, so our customers can too," he added.

With the Dutch maker of chip-making machines ASML leading the previous funding round and Samsung Electronics this round, Mistral said it had attracted the support of advanced manufacturers in the sector.

"This support reflects growing confidence that Mistral's approach can help organizations deploy state-of-the-art AI inside complex real-world environments while maintaining control over their data, infrastructure and knowledge," the company said.

Mistral has increased its spending on infrastructure this year, including a data center, its first, which will be built in France, in addition to a commercial agreement with Microsoft.


Huawei Launches New Foldable Smartphone as Competition with Xiaomi, Apple Heats Up

The Huawei logo is seen in this illustration taken on January 29, 2025. (Reuters)
The Huawei logo is seen in this illustration taken on January 29, 2025. (Reuters)
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Huawei Launches New Foldable Smartphone as Competition with Xiaomi, Apple Heats Up

The Huawei logo is seen in this illustration taken on January 29, 2025. (Reuters)
The Huawei logo is seen in this illustration taken on January 29, 2025. (Reuters)

Huawei launched a new version of its flagship foldable smartphone on Monday as it seeks to defend its lead in the Chinese market for premium handsets against Apple and Xiaomi, both of which are also unveiling new products.

The new Mate XT2 folds out twice to open into a tablet-sized screen and ‌features Huawei's ‌new Kirin 9050 Pro chip.

Huawei ‌says ⁠the chip's design ⁠allows it to deliver more computing power while using less electricity, helping the company overcome US restrictions on access to advanced technology.

Xiaomi launches a rival foldable phone later on Monday, while Apple unveils its latest ⁠iPhone series on Wednesday, with expectations ‌high that it ‌too will be unveiling a foldable phone.

The Mate XT2 ‌features a redesigned folding mechanism, improved water ‌resistance as well as an optional screen that prevents people nearby from seeing what is displayed. It also has upgraded cameras and delivers ‌42% better overall performance than its predecessor, based on company tests.

Huawei, which ⁠does ⁠not sell in the US due to sanctions, leads China's smartphone market with a 22.6% share in the second quarter, ahead of Apple's 18.1%, according to consultancy IDC. Xiaomi has 12.4% of the market.

Huawei is even more dominant in folding phones, accounting for 68% of shipments in China in the second quarter, according to Smart Analytics Global, a US-based research company.