Microsoft server software comes under widespread cyberattack | Meta rejects EU’s AI Code of Practice, refuses to sign | ACSC issues warning over Microsoft server software attack

Euro-Atlantic and Indo-Pacific united in response to hybrid threats

Good morning. It's Tuesday, 22nd of July.

The Daily Cyber & Tech Digest focuses on the topics we work on, including cybersecurity, critical technologies, foreign interference & disinformation.

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• Microsoft’s server software is under attack from unidentified hackers, with cybersecurity analysts warning of widespread security breaches across the globe. Bloomberg

• Meta’s chief global affairs officer, Joel Kaplan, has labelled the legislation as “overreach” and said that it would harm the development and progression of the technology. CyberDaily

• Australian government agencies and businesses are being urged to review their networks for on-premise instances of Microsoft SharePoint Server after hackers exploited a major security flaw in the software. InnovationAus

ASPI

Euro-Atlantic and Indo-Pacific united in response to hybrid threats
The Strategist
James Corera and Bart Hogeveen
The European Union’s high representative for foreign affairs and security, Kaja Kallas, and Singapore’s coordinating minister for national security, K Shanmugam, on Friday called out Russian and Chinese hybrid warfare, respectively. Their complementary statements highlight the importance of coordinated action between the Euro-Atlantic and Indo-Pacific. Kallas’s warning extends beyond Europe’s security crisis to the Indo-Pacific, where Moscow and Beijing’s hybrid playbook offers a warning and the coordinated global response offers a model.

Australia

ACSC issues warning over Microsoft server software attack
InnovationAus
Justin Hendry
Australian government agencies and businesses are being urged to review their networks for on-premise instances of Microsoft SharePoint Server after hackers exploited a major security flaw in the software. The Australian Cyber Security Centre issued an alert about “active attacks” on the software used to share documents on Sunday, just hours after Microsoft first alerted customers to the vulnerability and recommended urgent security updates.

Tech giants in the gun as ATO investigates data centre tax payments
The Australian Financial Review
Tess Bennett and Sam Buckingham-Jones
Tax officials are auditing some of the world’s largest technology companies following concerns that profits from lucrative local data centres are being under-reported in Australia and funnelled offshore instead. Google, Amazon and Microsoft are investing billions of dollars in digital infrastructure in Australia, by either building their own data centres or leasing space from AirTrunk, NextDC and CDC. These data centres power the booming artificial intelligence industry.

Parliament preview: What’s stuck on Albo’s tech agenda
InnovationAus
Joseph Brookes
The returned Albanese government is descending on Canberra with new technology leaders and the Prime Minister’s edict for a “year of delivery”. But much of its tech agenda is stuck in the past, with key reforms for privacy, automation and Big Tech hanging over from the first term. A thumping election win allows Labor to pick up the pace in the 48th Parliament, which commences on Tuesday with an easier path for the government in the Senate and a commanding hold of the House.

Govt goes to market for new grant platform technology
InnovationAus
Denham Sadler
The federal government has approached the market for a new SaaS-based platform to administer the $30 billion in Commonwealth grants deployed each year, replacing the troubled Grants Hubs. The Department of Finance has issued a request for information for software-as-a-service solutions for grants administration. It is looking for a whole-of-government uniformed platform to provide the underpinning system for grants across the Commonwealth, which in 2023-24 covered more than $27 billion.

China

China denies link to espionage group accused of attacking Singapore critical infrastructure
Reuters
The Chinese embassy in Singapore refuted claims that an espionage group accused of performing cyberattacks on Singapore's critical infrastructure was linked to China. In a Facebook post published over the weekend, the Chinese embassy said such claims were "groundless smears and accusations". "The embassy would like to reiterate that China is firmly against and cracks down all forms of cyberattacks in accordance with law. China does not encourage, support or condone hacking activities," it wrote on Saturday.

USA

After website hack, Arizona election officials unload on Trump’s CISA
CyberScoop
Derek B. Johnson
Arizona election officials say a hack targeting a statewide online portal for political candidates resulted in the defacement and replacement of multiple candidate photos with the late Iranian Ayatollah Ruhollah Khomeini. While officials say the threat is contained and the vulnerability has been fixed, they also blasted the lack of support they’ve received from the federal government, claiming the Cybersecurity and Infrastructure Security Agency is no longer a reliable partner in election security under the Trump administration.

Why it’s time for the US to go on offense in cyberspace
CyberScoop
Dave Kennedy
With the Trump administration’s sweeping $1 billion cyber initiative in the “Big Beautiful Bill” and growing congressional momentum under the 2026 National Defense Authorization Act to strengthen cyber deterrence, we’re seeing a shift in posture that many in the security community have long anticipated, although often debated: a decisive pivot toward more robust offensive cyber operations. While many may disagree with the decision to “go on offense,” we need to recognize the changing threat landscape and the failure of our previous restrained approach.

What chip-stock investors are missing about tariffs
The Wall Street Journal
Asa Fitch
The artificial-intelligence boom has lifted chip stocks this year and made Nvidia the most valuable listed company in the world. But the future looks increasingly murky because of a factor that investors seem to be blithely ignoring: tariffs. President Trump threatened to hit chip imports with tariffs after he took office early this year and soon initiated a trade investigation into the sector alongside pharmaceuticals, copper and lumber.

Lawmakers want US tech CEOs to address concerns about submarine cables
Reuters
David Shepardson
Three Republican House lawmakers on Monday asked the CEOs of Alphabet, Facebook parent Meta, Amazon.com and Microsoft if they have adopted adequate safeguards to address growing national security concerns on submarine communications cables. Washington has been raising alarm about the network of more than 400 subsea cables that handle 99% of international internet traffic and about threats from China and Russia.

North Asia

South Korea's won-backed stablecoin ambition sparks crypto debates in Asia
Nikkei Asia
Kim Jaewon and Stella Yifan Xie
South Korea's new government under President Lee Jae Myung is eager to issue won-backed stablecoins, digital tokens pegged to traditional currencies, hoping to nurture the country's digital asset market and give it a prominent place globally. Seoul's move comes as a part of a broader battle for the crypto technology's geopolitical influence, following an aggressive push for dollar-pegged coins by the U.S.

Ukraine – Russia

Russia’s drone swarms pierce Ukraine’s defences at record rate
Financial Times
Charles Clover
Russia’s “swarm” tactics against Ukraine are increasingly cutting through Ukraine’s defences, with drones striking targets at three times the typical rate in recent months, according to official data. Mass attacks of Shaheds, an Iranian-designed drone now manufactured in Russia, appear to be overwhelming Ukraine’s beleaguered air defences, with the drone hit rate reaching its highest levels since Moscow’s invasion.

Europe

Meta rejects EU’s AI Code of Practice, refuses to sign
CyberDaily
Daniel Croft
The EU Code of Practice for general-purpose AI, which is a voluntary framework set to go into effect on 2 August, was published earlier this month and sets requirements for makers of general-purpose AI models, such as not using pirated content for training, providing and updating documentation regarding their AI tools and requiring them to abide by the requests of content owners to not have their data used for AI training. In addition, the AI Act itself will define “high-risk” use cases for AI, such as with facial recognition and biometrics and regarding education and employment, and outlaw some “unacceptable risk” use cases such as behavioural manipulation.

• Exclusive: Meta, X and LinkedIn appeal unprecedented VAT claim by Italy
  Reuters
  Emilio Parodi
  U.S. tech giants Meta, X and LinkedIn have lodged an appeal against an unprecedented VAT claim by Italy that could influence tax policy across the 27-nation European Union, four sources with direct knowledge of the matter said on Monday. This is the first time that Italy has failed to reach a settlement agreement after bringing tax cases against tech companies, resulting in a fully-fledged judicial tax trial being launched.

Can Europe break free of American tech supremacy?
Financial Times
Barbara Moens
Benjamin Revcolevschi, an engineer by training, did not imagine one of his future jobs would involve meeting digital ministers from EU member states almost every week. But the chief executive of OVHcloud, a provider of cloud computing services, is riding a new wave of political interest as EU leaders increasingly wake up to the bloc’s dependence on US tech companies for the infrastructure that powers everything from healthcare systems to national defence.

France has launched criminal probe of X over alleged algorithm ‘manipulation’, platform says
Financial Times
The French government has launched a criminal investigation into Elon Musk’s X over “the alleged manipulation of its algorithm” and “fraudulent” data extraction, the social media platform said. In a statement on Monday, X said that French authorities had requested access to the company’s recommendation algorithm, as well as data “about all user posts on the platform”. X said it “remains in the dark” about the specific allegations, which it denies, and that it “has not acceded to the French authorities’ demands”.

UK

UK government seeks way out of clash with US over Apple encryption
Financial Times
Anna Gross, Tim Bradshaw and Lauren Fedor
Sir Keir Starmer’s government is seeking a way out of a clash with the Trump administration over the UK’s demand that Apple provide it with access to secure customer data, two senior British officials have told the Financial Times. The officials both said the Home Office, which ordered the tech giant in January to grant access to its most secure cloud storage system, would probably have to retreat in the face of pressure from senior leaders in Washington, including vice-president JD Vance.

• UK may back down on demand for backdoor access to Apple users’ encrypted data
  The Guardian
  Robert Booth
  Pressure from Washington could lead the UK government to climb down on its demand that Apple provide British law enforcement agencies with backdoor access to encrypted customer data, it has been reported. In January, the UK Home Office formally asked Apple to provide law enforcement agencies access to heavily encrypted data held on behalf of its customers. But the US company resisted and withdrew its advanced data protection service from the UK market. It argues privacy is one of its “core values”.

OpenAI signs deal with UK to find government uses for its models
The Guardian
Robert Booth
Sam Altman, leader of one of the world’s biggest artificial intelligence companies, has signed a deal with the British government to explore the deployment of advanced AI models in areas including justice, security and education. The chief executive of OpenAI, which has been valued at $300bn and provides the ChatGPT suite of large language models, agreed the memorandum of understanding with the science and technology secretary, Peter Kyle, on Monday.

Big Tech

Microsoft server software comes under widespread cyberattack
Bloomberg
Mark Anderson and Jane Lanhee Lee
Microsoft’s server software is under attack from unidentified hackers, with cybersecurity analysts warning of widespread security breaches across the globe. The Redmond, Washington-based software maker said it had released a new security patch for customers to apply to their SharePoint servers “to mitigate active attacks targeting on-premises servers,” adding it was working to roll out others.

• Microsoft server hack hit about 100 organizations, researchers say
  Reuters
  James Pearson and Raphael Satter
  A sweeping cyber espionage operation targeting Microsoft server software compromised about 100 organizations as of the weekend, two of the organizations that helped uncover the campaign said on Monday. Microsoft on Saturday issued an alert about "active attacks" on self-hosted SharePoint servers, which are widely used by organizations to share documents and collaborate within organizations. SharePoint instances run off of Microsoft servers were unaffected.

• Microsoft alerts businesses, governments to server software attack
  Reuters
  Microsoft has issued an alert about "active attacks" on server software used by government agencies and businesses to share documents within organizations, and recommended security updates that customers should apply immediately. The FBI said on Sunday it is aware of the attacks and is working closely with its federal and private-sector partners, but offered no other details.

Google A.I. System wins gold medal in International Math Olympiad
The New York Times
Cade Metz
An artificial intelligence system built by Google DeepMind, the tech giant’s primary artificial intelligence lab, has achieved “gold medal” status in the annual International Mathematical Olympiad, a premier math competition for high school students. It was the first time a machine — which solved five of the six problems at the 2025 competition, held in Australia this month — reached that level of success, Google said in a blog post on Monday.

SoftBank and OpenAI’s $500 billion AI project struggles to get off ground
The Wall Street Journal
Eliot Brown and Berber Jin
A $500 billion effort unveiled at the White House to supercharge the U.S.’s artificial-intelligence ambitions has struggled to get off the ground and has sharply scaled back its near-term plans. Six months after Japanese billionaire Masayoshi Son stood shoulder to shoulder with Sam Altman and President Trump to announce the Stargate project, the newly formed company charged with making it happen has yet to complete a single deal for a data center.

Nvidia CEO Huang replaces Elon Musk as China's bridge to Trump
Nikkei Asia
Ken Moriyasu and Yifan Yu
In the summer of 2018, two red Teslas drove into Beijng's Zhongnanhai, the walled-off compound that houses the headquarters of the Chinese Communist Party and the State Council. The Teslas parked in front of the Zi Guang Ge, or Hall of Purple Light, and CEO Elon Musk walked into the two-story pavilion to meet the powerful vice president, Wang Qishan, a close ally to President Xi Jinping.

Artificial Intelligence

‘You can make really good stuff – fast’: new AI tools a gamechanger for film-makers
The Guardian
Dan Milmo
A US stealth bomber flies across a darkening sky towards Iran. Meanwhile, in Tehran a solitary woman feeds stray cats amid rubble from recent Israeli airstrikes. To the uninitiated viewer, this could be a cinematic retelling of a geopolitical crisis that unfolded barely weeks ago – hastily shot on location, somewhere in the Middle East. However, despite its polished production look, it wasn’t shot anywhere, there is no location, and the woman feeding stray cats is no actor – she doesn’t exist.

Meta allows ads crowdfunding for IDF drones, consumer watchdog finds
The Guardian
Johana Bhuiyan
Meta is hosting ads on Facebook, Instagram and Threads from pro-Israel entities that are raising money for military equipment including drones and tactical gear for Israeli Defense Force battalions, seemingly a violation of the company’s stated advertising policies, new research shows. “We are the sniper team of Unit Shaked, stationed in Gaza, and we urgently need shooting tripods to complete our mission in Jabalia,” one ad on Facebook read, first published on 11 June and still active on 17 July.

Research

US MTCR reform and its implications for Australian industry and defence
United States Studies Centre
The Missile Technology Control Regime is a voluntary, multilateral export control regime designed to limit the spread of missile and unmanned aerial vehicle technologies capable of delivering weapons of mass destruction. The United States, long a staunch advocate of the regime, has in recent years begun to reinterpret and relax its national MTCR obligations in response to concerns that the MTCR is constraining interoperability and burden-sharing with allies and undermining the international competitiveness of the US defence industry.

Events & Podcasts

The Sydney Dialogue 2025
The Australian Strategic Policy Institute is pleased to announce the Sydney Dialogue, the world’s premier policy summit for critical, emerging and cyber technologies, will return on 4-5 December. Now in its fourth year, the dialogue attracts the world’s top thinkers, innovators and policymakers, and focusses on the most pressing issues at the intersection of technology and security. TSD has become the place where new partnerships are built among governments, industry and civil society, and where existing partnerships are deepened.

Bethany Allen explains her investigation into a British university’s joint venture campus in China
ASPI
Bethany Allen explains her investigation into a British university’s joint venture campus in China and the risks of critical tech collaboration. Recently an ASPI team led by our head of China investigations and analysis Bethany Allen published a report on a joint venture university campus between Xi’an Jiaotong University in China and Liverpool University in Britain. Their findings raise serious questions about research collaboration into sensitive technologies, including those with military applications.

How governments in Asia juggle the pros and cons of AI
Melbourne Asia Review
Governments across Asia are confronting a new kind of policy challenge — one that’s moving faster than most have ever had to legislate for. The astonishing speed of generative AI development has prompted both excitement and alarm in Asia’s capitals, where the potential for economic growth and national prestige is being weighed against serious questions about risk, regulation, and long-term control. In China, we’ve seen some of the world’s earliest binding regulations on generative AI, with policymakers steering innovation to align with stated political values.

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