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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.

Service hacking by China is meant to create 'panic and chaos', says Fmr. CISA Director Chris Krebs

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.”

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Nintendo profit plunges 69% as it cuts forecast for sales of ageing Switch console

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Nintendo profit plunges 69% as it cuts forecast for sales of ageing Switch console

Mario poses at the “SUPER NINTENDO WORLD” welcome celebration at Universal Studios Hollywood on February 16, 2023 in Universal City, California.

Rodin Eckenroth | Getty Images Entertainment | Getty Images

Nintendo on Tuesday cut forecast for Switch sales for its fiscal year ending March 2025 as demand wanes for its ageing console.

The Japanese gaming giant said it now expects to sell 12.5 million units of the Switch over the course of the period. That’s down from a previous forecast of 13.5 million units.

Nintendo has been contending with fading demand for its flagship Switch console, which is now more than seven years old.

Investors are waiting for news surrounding a successor to the Switch, which they hope will re-energize Nintendo’s gaming business. In the past, the company said that the Switch successor will be announced in its current fiscal year, which ends in March 2025.

Nintendo also cut full fiscal year forecasts for sales and operating profit. The company said it now expects sales of 1.28 trillion yen versus a previous forecast of 1.35 trillion yen. The operating profit outlook for the period was slashed from 400 billion yen to 360 billion yen.

Here’s how Nintendo did in its fiscal second quarter ended Sept. 30 versus LSEG estimates:

  • Revenue: 276.7 billion Japanese yen ($1.8 billion), compared with 273.34 billion yen expected.
  • Net profit: 27.7 billion yen, versus 48.06 billion yen expected.

Revenue fell 17% year-on-year. Net profit plunged just over 69% versus the same period last year.

Super Mario, Zelda boost fading

The Switch is Nintendo’s second best-selling console in history, behind the Nintendo DS. Despite the recent fall in sales, Nintendo has prolonged the console’s appeal for an extended period of time since its launch in 2017 by relying on its recognizable characters.

In its last fiscal year, Nintendo managed to reinvigorate sales of the Switch thanks to the the success of the “Super Mario Bros. Movie” and the highly anticipated release of the “The Legend of Zelda: Tears of the Kingdom” game, which underscored the appeal of its iconic characters.

But that effect is fading.

On Tuesday, Nintendo noted the boost that the company received in the first half of its last fiscal year, but said “there were no such special factors in the first half of this fiscal year, and with Nintendo Switch now in its eighth year since launch, unit sales of both hardware and software decreased significantly year-on-year.”

Sales of the Switch totaled 4.72 units in the six months ended Sept. 30, compared with 6.84 million units in the same period of last year.

In the face of falling sales, Nintendo has tried to license out its intellectual property for use everywhere, from movies to theme parks. A new Super Mario movie is slated for release in 2026.

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Meta extends ban on new political ads past Election Day

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Meta extends ban on new political ads past Election Day

Meta’s Mark Zuckerberg plans to visit South Korea, scheduling key meetings during the trip, according to a statement by Meta on Wednesday, which did not provide further details. Reportedly, Zuckerberg is anticipated to meet with Samsung Electronics chairman Jay Y. Lee later this month to discuss AI chip supply and other generative AI issues, as per the South Korean newspaper Seoul Economic Daily, citing unnamed sources familiar with the matter.

Alex Wong | Getty Images News | Getty Images

Meta extended its ban on new political ads on Facebook and Instagram past Election Day in the U.S.

The social media giant announced the political ads policy update on Monday, extending its ban on new political ads past Tuesday, the original end date for the restriction period.

Meta did not specify the day it will lift the restriction, saying only that the ad blocking will continue “until later this week.” The company did not say why it extended the political advertising restriction period.

The company announced in August that any political ads that ran at least once before Oct. 29 would still be allowed to run on Meta’s services in the final week before Election Day. Other political ads will not be allowed to run.

Organization with eligible ads will have “limited editing capabilities” while the restriction is still in place, Meta said. Those advertisers will be allowed to make scheduling, budgeting and bidding-related changes to their political ads, Meta said.

Meta enacted the same policy in 2020. The company said the policy is in place because “we recognize there may not be enough time to contest new claims made in ads.”

Google-parent Alphabet announced a similar ad policy update last month, saying it would pause ads relating to U.S. elections from running in the U.S. after the last polls close on Tuesday. Alphabet said it would notify advertisers when it lifts the pause.

Nearly $1 billion has been spent on political ads over the last week, with the bulk of the money spent on down-ballot races throughout the U.S., according to data from advertising analytics firm AdImpact.

Watch: Tech still investing big in AI development despite few breakout products.

Tech still investing big in AI development despite few breakout products

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Jeff Bezos and OpenAI invest in robot startup Physical Intelligence at $2.4 billion valuation

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Jeff Bezos and OpenAI invest in robot startup Physical Intelligence at .4 billion valuation

Sam Altman, CEO of OpenAI, attends the 54th annual meeting of the World Economic Forum, in Davos, Switzerland, January 18, 2024 (L), and Amazon CEO Jeff Bezos speaks during the UN Climate Change Conference (COP26) in Glasgow, Scotland, Britain, November 2, 2021.

Reuters

Physical Intelligence, a robot startup based in San Francisco, has raised $400 million at a $2.4 billion post-money valuation, the company confirmed Monday to CNBC.

Investors included Amazon founder Jeff Bezos, OpenAI, Thrive Capital and Lux Capital, a Physical Intelligence spokesperson said. Khosla Ventures and Sequoia Capital are also listed as investors on the company’s website.

Physical Intelligence’s new valuation is about six times that of its March seed round, which reportedly came in at $70 million with a $400 million valuation. Its current roster of employees includes alumni of Tesla, Google DeepMind and X.

The startup focuses on “bringing general-purpose AI into the physical world,” per its website, and it aims to do this by developing large-scale artificial intelligence models and algorithms to power robots. The startup spent the past eight months developing a “general-purpose” AI model for robots, the company wrote in a blog post. Physical Intelligence hopes that model will be the first step toward its ultimate goal of developing artificial general intelligence. AGI is a term used to describe AI technology that equals or surpasses human intellect on a wide range of tasks.

The news comes days after OpenAI launched a search feature within ChatGPT, its viral chatbot, that positions the AI startup to better compete with search engines like GoogleMicrosoft‘s Bing and Perplexity. Last month, OpenAI also closed its latest funding round at a valuation of $157 billion.

Physical Intelligence’s vision is that one day users can “simply ask robots to perform any task they want, just like they can ask large language models (LLMs) and chatbot assistants,” the startup wrote in the blog post. In case studies, Physical Intelligence details how its tech could allow a robot to do laundry, bus tables or assemble a box.

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