America’s drinking water is facing attack, with links back to China, Russia and Iran
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The City of Wichita recently had an experience that’s become all too common — its water system was hacked. The cyberattack, which targeted water metering, billing and payment processing, followed the targeting of water utilities across the U.S. in recent years.
In going after America’s water, hackers aren’t doing anything special. Despite rising fears of AI use in cyber threats, the go-to criminal way into systems remains preying on human foibles, be it via phishing, social engineering, or a system still running on a default password — “old school” cyberattacks, according to Ryan Witt, vice president of cybersecurity firm Proofpoint.
The rising cybercrime wave targeting key infrastructure led the Environmental Protection Agency to issue an enforcement alert warning that 70% of water systems it inspected do not fully comply with requirements in the Safe Drinking Water Act. Without quantifying an exact number, the EPA said some have “alarming cybersecurity vulnerabilities” — default passwords that have not been updated, vulnerable single login setups, and former employees who retained systems access.
While the methods may be simple, an attack last year by an Iranian-backed activist group against 12 water utilities in the U.S. reinforced how purposeful “an attacker’s mindset” can be, according to Witt. The targeted utilities all contained equipment that was Israeli-made.
FBI, NSA, CISA all express concern
In February, the FBI warned Congress that Chinese hackers have burrowed deep into the United States’ cyber infrastructure in an attempt to cause damage, targeting water treatment plans, the electrical grid, transportation systems and other critical infrastructure. A Russian-linked hack in January of a water filtration plant in a small Texas town, Muleshoe — located near a U.S. Air Force base — caused a water tank to overflow. “Water is among the least mature in terms of security,” Adam Isles, head of cybersecurity practice for Chertoff Group, recently told CNBC.
Psychological impact on the population is also a strategic aim, seen not only in targeting of water assets but the Colonial Pipeline hack that made national headlines in 2021, and in the words of the federal Cybersecurity and Infrastructure Security Agency, featured “snaking lines of cars at gas stations across the eastern seaboard and panicked Americans filling bags with fuel, fearful of not being able to get to work or get their kids to school.”
Attacks on U.S. water utilities’ IT systems can have a similar psychological impact, and even if the attacks don’t directly interfere with the operations of the utility, still lessen public trust in water supply. No hack to date has shut off the water to a population, but that’s the bigger worry, said Stuart Madnick, an MIT professor of engineering systems and co-founder of Cybersecurity at MIT Sloan.
Meddling with a water supply through attacks targeting IT (informational technology), like Wichita’s system, is minor in comparison to a successful attack on the OT (operating technology) that controls water plants. That is a massive risk, Madnick said, and the threat of it happening is not zero.
“We have demonstrated in our lab how operations, such as a water plant, could be shut down not just for hours or days, but for weeks. It is definitely technically possible,” he said.
A recent letter sent by EPA Administrator Michael Regan and National Security Advisor Jake Sullivan to the nations’ governors detailed the urgency of the threat. But Madnick is wary of the government’s ability to act quickly or robustly enough to prevent such an occurrence. Budgets, outdated infrastructure, and reluctance to move on an issue that may seem both vital and daunting suggest that the fixes may indeed not come quickly enough. “It has not happened yet, and serious action to prevent ‘likely’ will not happen, until after it has happened,” he said.
Outdated water utility technology
Like any modern system, water utilities rely on technology for monitoring, for operations, and for customer communication. The technology creates vulnerabilities — for providers and users — so the need for enhanced security measures is acute. “The community risk from cyberattacks includes an attacker gaining control of the operations of a system to damage infrastructure, disrupt the availability or flow of water, or altering the chemical levels, which could allow untreated wastewater to be discharged into a waterway or contaminate drinking water provided to a community,” said an EPA spokesman.
Witt says there are some initial steps to take in improving the cyber hygiene of dated systems. “Improving password strength, reducing exposure to public-facing internet, and the need for cybersecurity awareness training,” would go a long way to shoring up defenses, he said. Another potential fix is the deployment of what are called air-gapped systems that separate supervisory and control systems from other networks. Since the easiest way into these systems is to obtain credentials and then exploit the system, “A systems admin should not be able to access office systems such as email and be able to operate a control panel of a water system from the same laptop,” Witt said.
For the most part, attacks that have occurred have been preventable, according to the EPA. “Systems were victimized by destructive and costly cyberattacks because they failed to adopt basic cyber resiliency practices,” the EPA spokesman said. “All drinking water and wastewater systems are at risk — large and small, urban and rural,” he said.
While it has not been a tool needed to date in these water utility attacks, AI is coming alongside the concerted cyber efforts of geopolitical rivals. “Rapid advances in artificial intelligence are giving cyberthreat actors more sophisticated tactics, techniques, and procedures to penetrate operational technology that controls critical infrastructure facilities,” the EPA spokesman said. “These attacks have been linked to a variety of types of malicious actors, including hackers working on behalf of or in support of other nations who could use disruptions to U.S. critical infrastructure to their strategic advantage.”
The X logo appears on a phone, and the xAI logo is displayed on a laptop in Krakow, Poland, on April 1, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)
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Elon Musk‘s xAI Holdings is in discussions with investors to raise about $20 billion, Bloomberg News reported Friday, citing people familiar with the matter.
The funding would value the company at over $120 billion, according to the report.
Musk was looking to assign “proper value” to xAI, sources told CNBC’s David Faber earlier this month. The remarks were made during a call with xAI investors, sources familiar with the matter told Faber. The Tesla CEO at that time didn’t explicitly mention any upcoming funding round, but the sources suggested xAI was preparing for a substantial capital raise in the near future.
The funding amount could be more than $20 billion as the exact figure had not been decided, the Bloomberg report added.
Artificial intelligence startup xAI didn’t immediately respond to a CNBC request for comment outside of U.S. business hours.
The AI firm last month acquired X in an all-stock deal that valued xAI at $80 billion and the social media platform at $33 billion.
“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said on X, announcing the deal. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
Read the full Bloomberg story here.
— CNBC’s Samantha Subin contributed to this report.
Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.
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Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.
“GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”
The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.
Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.
Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.
Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.
During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.
Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.
Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.
Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.
“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.
WATCH: Gemini delivering well for Google, says Check Capital’s Chris Ballard
CNBC’s Jennifer Elias contributed to this report.
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