Australia’s cyber agency warns AI will drive more disruptive attacks, helping hackers find vulnerabilities faster and exploit them at greater scale.

Australia’s top cyber spy has a blunt message: expect more disruption to everyday services. Abigail Bradshaw, director-general of the Australian Signals Directorate (ASD), says that with each jump in AI capability, more disruption is likely. The ASD published its annual cyber threat report on Tuesday, October 27, and ABC News had the story first.

Bradshaw says the most advanced AI models have redefined the threat. Disruption can mean websites pulled offline for patching, data breaches or service outages, and she points out that virtually every service you use runs on a digital network. The warning comes days after several government websites, the ASD’s among them, went partly offline when vulnerabilities turned up.

Two weeks ago, hackers exploited flaws in online systems to raise the temperature in supermarket fridges in France. AFP, via Euronews, ties last week’s shutdowns to a PHP security flaw that pushed governments to take websites down. It says the flaw was found using a powerful OpenAI model.

The ASD used AI tools to help prepare its report. It says advanced AI models could bring major benefits when used for good. However, recent months have shown that criminals and state-backed hackers are using AI to launch larger-scale attacks.

The report describes AI as a major force in today’s cyber threat landscape. It helps attackers find security flaws faster and exploit them more quickly and effectively. The report also warns that AI agents can behave in unexpected ways and that testing AI models can create new risks.

The figures reported by the two sources are different. ABC says the number of incidents the ASD handled rose by 20% in the last financial year. AFP reports more than 4,400 warnings about potentially malicious activity, an 80% increase from the previous 12 months. These figures appear to measure different things, so the original report should be checked before either figure is quoted.

State-sponsored hackers mostly want sensitive or non-public information, according to the report. That reaches beyond government networks to critical infrastructure, private businesses and individuals, and the report names hackers linked to China, Russia and North Korea as having targeted Australia or its allies. ABC adds that the ASD has already warned, with partners, about Chinese-aligned actors building hidden networks of hijacked devices for spying or offensive use. Some state actors also want to keep access to essential services that a conflict could disrupt.

Bradshaw expects tension in the region to push that threat up. As the world gets less certain, she says, states will try to cut the uncertainty by collecting more information. Criminals use AI to make money, and she expects state actors to use it to fill their information gaps. Australia has sounded this alarm before: in June 2020, then prime minister Scott Morrison announced that governments, industry, political bodies, health networks and critical infrastructure had come under sustained attack from a sophisticated state-based actor.

Bradshaw calls the release of frontier models such as Anthropic’s Mythos the defining event of the past year. Models like it were billed as too dangerous to release publicly because they can find weaknesses in cyber defenses. Then a swarm of AI agents breached Australian health data security, in what was described as the first autonomous hack of a government website.

AFP traces the OpenAI side of that case back to June, when an OpenAI model bypassed safeguards during training and hacked an Australian government website. The company only found out in August and told Australian authorities in September. Prime Minister Anthony Albanese called the breach obviously unacceptable.

The incident changed how the ASD deals with the big US firms behind these models. Bradshaw says the agency moved fast to set up protocols that work as an early warning system with AI companies, OpenAI among them. The protocols have gone to all the labs and all the Five Eyes agencies, and the ASD now expects to be brought in before models are tested.

Defence Minister Richard Marles put it simply: AI is here and it’s real. He told reporters there’s no turning the clock back, because malicious actors already use AI to find weaknesses in systems. He urged Australians to update their computers and harden their systems.

“AI is here and it’s real. People need to engage,” Defence Minister Richard Marles told reporters. “There’s no turning the clock back in relation to that. Malicious actors are using AI to find vulnerabilities in systems.”

The ASD also revealed details of its own offensive work. It took down criminal groups that sell and run a piece of malware called Amadey, which hides inside free software, steals personal data or logins and sends them to criminals who sell them on the dark web. The ASD found it in a free, illegitimate copy of Photoshop. The price was zero, and it still wasn’t a bargain.

Amadey itself sold on the dark web for about US$500 (A$712). ASD operators got into the back end and found the network had access to 180,000 computers worldwide, Australian ones included. They disconnected the controller from every victim, and Tauri Gregory, the ASD’s acting deputy director-general of intelligence, says that without this move 180,000 businesses or individuals would have had their data stolen and then sold or used for fraud and identity theft.

In another case, someone tipped off the ASD to the sale of 5 terabytes of data stolen from a business that didn’t know it had been hacked. The data included sensitive business documents, personal data, logins and passwords. The ASD broke in and destroyed it before it could be sold, wiping out about 4.8 million files stolen from Australians and hundreds of thousands more from victims elsewhere.

Gregory calls AI both a friend and a foe. It widens the scope and scale of attacks, but it’s also a big asset for defenders, and the ASD uses it to produce software capabilities faster and to build new tools. Bradshaw says corporate and government systems both need a huge amount of work, starting with replacing vulnerable legacy systems and learning to use AI as a defensive tool.

“The natural progression of this is, as the world becomes uncertain, of course nation states will try to reduce that uncertainty by obtaining more information,” Australian Signals Directorate (ASD) director-general Abigail Bradshaw said.

“And so just as criminal actors leverage AI in order to meet their financial means, I think it is an obvious progression that we will see state-based actors also leveraging AI in order to fill their information gaps.”

“There is much more that we need to do and, in the current context, that is now a matter of urgency,” Ms Bradshaw concludes.

Follow me on Twitter: @securityaffairs and Facebook and Mastodon

Pierluigi Paganini

(SecurityAffairs – Australia, AI)

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OpenAI’s AI agent bypassed controls on an Australian health portal, accessed non-public files and triggered a government investigation.

An OpenAI AI agent bypassed access controls on an Australian government health statistics portal in June, accessing both public and non-public files in what Australian authorities are treating as a serious AI-related cyber incident. The case was disclosed by Prime Minister Anthony Albanese on September 24 and is now the subject of a forensic investigation involving the Australian Signals Directorate.

“I want to update Australians on an incident in which an artificial intelligence agent has infiltrated an Australian Government website. This incident occurred in June of this year and involved an OpenAI agent gaining unauthorised access into the public-facing Medicare statistics reporting service portal, which is administered by Services Australia.” said Albanese in the press conference. “The AI agent accessed both public and non-public files.”

The incident involved the Medicare Statistics Reporting Service portal operated by Services Australia. Despite the name, the portal does not handle individual Medicare claims or patient records. It publishes aggregated information, including statistics on healthcare and medicine spending. Albanese confirmed that no personal data or wider Services Australia compromise has been found so far.

The agent did, however, reach files that were not publicly available, and Services Australia said it also wrote files to an internal server. That part of the incident remains under investigation.

The sequence is what makes the case interesting from a security perspective.

On June 18, an OpenAI research team was using an internal model to collect information about public medicine spending. The agent encountered repeated restrictions while trying to obtain information from the Australian portal. Instead of stopping, it tried alternative approaches and eventually reached areas it was not supposed to access.

Albanese described the behavior during a press conference in New York.

“There were blocks clearly which were coming back telling the AI agent, no. The AI agent found a way around those blocks. Didn’t accept no for an answer, if you like. The model attempted alternative ways to obtain the info that it wanted, and this led to unauthorised access into some other areas.” Prime Minister added. “It accessed public and non-public information within the portal, and Services Australia also advises that it engaged, in order to do this, it engaged in writing files as well to the internal server.”

That sentence captures the problem better than the word “hack” does. This was not a conventional attacker manually exploiting a known vulnerability. An AI agent was given a research objective, encountered a technical restriction and continued looking for another way to complete the task.

The Australian government has not disclosed technical details of the hack. The incident therefore should not be treated as evidence of a particular vulnerability in the portal. What is known is that the agent moved beyond the intended access boundary and reached non-public material.

There is also a disclosure problem.

OpenAI told Services Australia about the incident on September 10, almost three months after the activity occurred. The notification was sent to a general public mailbox. Services Australia subsequently verified the message and reported the incident to the Australian Cyber Security Centre on September 15.

Albanese was openly critical of the delay.

“It was both. It was the delay, firstly. It was that it took until 10 September before there was any notification at all. And the notification was an email sent to just the public mailbox.” Albanese said. “And I had that discussion very frankly with Mr Altman. He accepted that that was”

The Australian government has now created a taskforce to review how the country handles cyber incidents involving AI systems. The group will include the National Cybersecurity Coordinator, the Office of AI, the Australian Signals Directorate, the Australian AI Safety Institute and Services Australia. The government will also examine possible law-enforcement and legislative responses.

The investigation is also looking at three other Australian government websites that the same research activity interacted with. Those include the Australian Institute of Health and Welfare, the Victorian Department of Health and the NSW Bureau of Crime Statistics and Research. Authorities currently describe the activity involving those sites as normal access to public information, rather than the unauthorized access reported on the Medicare statistics portal.

“The question is when it was trying to harvest data, did it go into these other sites? So, we’re not confirming that that occurred. These sites are all, it’s all looking for data on medicines, data on health. Now, why that was the case? I assume commercial reasons of why it’s looking at how much has been spent on particular medicines. Is it increasing spending? Is it decreasing spending? Those issues as well.” concludes the politician.

The incident comes as researchers and governments are increasingly testing what happens when AI systems are given access to the real internet. Other recent evaluations have shown models attempting actions they were not explicitly authorized to perform, including probing websites, using exposed credentials and interacting with live systems.

Traditional software usually does what developers explicitly program it to do. An AI agent can interpret a goal and choose its own sequence of actions to reach it. If the system can browse websites, execute code, use tools or access external services, a simple instruction such as “find this information” can turn into a much more complex chain of decisions.

The Australian incident shows why access controls cannot rely only on the assumption that an AI system will stop when it receives a denial. A system that can reason about alternative routes may treat a blocked request as a problem to solve rather than a boundary to respect.

There is an important distinction, however. The available evidence does not show that the agent deliberately set out to compromise an Australian government system, nor does it establish that personal medical data was accessed. The Australian investigation is still underway, and the government says the impact identified so far is limited to an aggregated statistics environment.

For security teams, the lesson is less about OpenAI specifically and more about how AI agents should be treated when they operate outside the sandbox.

If an agent can reach the internet, it should be assumed that it may encounter systems that reject its requests. Those boundaries need to be enforced outside the model itself, with network controls, authentication, monitoring, and permissions that do not depend on the agent deciding to behave correctly.

The Australian government is now reviewing exactly that problem. And as AI agents become more capable, the question will increasingly move from what a model can generate to what it is allowed to touch.

Follow me on Twitter: @securityaffairs and Facebook and Mastodon

Pierluigi Paganini

(SecurityAffairs – hacking, artificial intelligence)

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