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As thousands of homes started to burn across Los Angeles on Jan. 7, fire hydrants stopped working. The rapid spread of flames in winds up to 100 miles per hour was happening too quickly for water pumps to keep up. It shocked the system and those fleeing the flames.

“This area is known for having fire issues, so you would think that they would be prepared for this,” said Joan Zoloth, 70, who said she first moved to the area when she was 6 years old.

Zoloth’s childhood home burned down in the Palisades Fire. Her own home around the corner and her son’s home nearby were also lost. 

“My mother was a teacher,” Zoloth said. “What people don’t realize is how much Malibu is filled with those types of people — not just movie stars.”

The remains of Joan Zoloth’s childhood home in Malibu, California, shown on Jan. 21, 2025, after it burned down in the Palisades Fire.

Andrew Evers

CNBC went to the wreckage of the Palisades Fire to ask officials what happened to the water system in LA, and what other cities can do to be better prepared. As many as 1 in 6 Americans now live in areas with significant wildfire risk. 

“A firefight at this size, such an urban conflagration, any system is going to have its challenges in maintaining water pressure,” said State Fire Marshall Daniel Berlant, of the California Department of Forestry and Fire Protection, known as Cal Fire.

Water pressure was the primary problem, rather than a lack of supply, fire officials and water experts told CNBC. 

Much of the water in the Palisades is provided by three 1 million gallon tanks that sit up in the hills, using gravity to maintain water pressure in the hydrants and homes they supply below.

Pumps forcibly move water from main lines and surrounding reservoirs to those tanks. The tanks were full when the fires started, but the pumps couldn’t replenish water in the tanks as quickly as firefighters were using it below. As the tanks depleted, so did the water pressure, until some 20% of hydrants ran dry.

“The hydrants would have run dry anywhere in the world with a fire event like this in the topography where this occurred,” said Greg Pierce, director of the UCLA Human Right to Water Lab.

Joan Zoloth lost three family homes in Malibu during the Palisades fire. She’s shown here at a family friend’s house where she’s staying in Venice, California, on January 21, 2025.

Andrew Evers

The closure of a 117 million gallon reservoir nearby complicated matters. Earlier this month, California Gov. Gavin Newsom and LA city council members called for investigations into why the Santa Ynez Reservoir hadn’t yet reopened after being drained almost a year ago to repair a tear in its cover.

“That would have made a difference,” Pierce said. “But even, by all accounts, if that reservoir was full, it wouldn’t have stopped the fire.”

Typically, fires are also fought by aircraft dropping water and fire retardant from above, but high winds kept them grounded for several hours on the first night of the fire.

Firefighters adapted with three tactics. They shuttled water through multiple engines connected to functional hydrants, drove it to locations in large water tenders, and pumped water directly from backyard swimming pools.

The LA Department of Water and Power said it quadrupled the water flow to the area and summoned 15 water tankers to directly refill fire trucks. It wasn’t enough.

The blame game

As immediate danger calmed, misinformation ran wild. The Federal Emergency Management Agency, or FEMA, reactivated its rumor response site, and the LA Fire Department directly responded to inaccurate social media posts.

President Donald Trump, for instance, claimed that water ran out in LA because of policies meant to protect a small endangered fish called the Delta smelt.

“It’s just simply false. It’s nonsense,” said Peter Gleick, co-founder of the Pacific Institute, a global water think tank. Gleick has been researching water issues for four decades.

On his first day back in office, Trump signed an executive order titled “Putting People Over Fish: Stopping Radical Environmentalism to Provide Water to Southern California.” After visiting with Newsom in LA, Trump signed another executive order directing federal officials to find ways to override “disastrous” California water policies. 

“There’s lots of conversations about California water policy and how we allocate water to protect fish or ecosystems versus deliver water to different kinds of users, but that had no role whatsoever to play in water availability for firefighting,” Gleick said.

Southern California reservoirs are at above-average levels for this time of year because of two plentiful rainy seasons, he added.

“Misinformation about how if we just had more water from Northern California in Southern California, that would have made the difference, that’s not true,” UCLA’s Pierce said. “Even if you have water stored fairly close by in the region, you can’t just move it quickly up to an area like the Palisades.”

That’s why billionaires Lynda and Stewart Resnick are also not to blame for the Palisades Fire, the water experts who spoke with CNBC said. 

The Resnicks own the Wonderful Company, which includes brands such as Pom and Fiji Water, and have sprawling farmlands in the San Joaquin Valley that grow pistachios, oranges and pomegranates. They’ve been the subject of attacks on social media, some of which are antisemitic, that blame them for the water pressure problems in LA because of their investment in a public-private water bank that’s 100 miles north of LA and that has no ability to impact water pressure in the Palisades.

“There’s absolutely no connection between the two. This is a localized problem,” said Felicia Marcus, former chair of the California State Water Resources Control Board.

The fires also resurfaced criticism around state and local water decisions, from taking down dams to not building enough reservoirs.

The real culprit is extremely dry conditions, experts told CNBC. Before the fires, LA saw close to zero rain since May, and 2024 was the hottest year on record for the planet, Gleick said.

“Higher temperatures means more demand for water by soils and vegetation and people and agriculture,” he said. “Climate change is in many ways a water problem. It’s being manifested by drought and floods and wildfires.”

More resilient water systems

This is not the first time hydrants ran dry in a major firefight. They’re designed to handle one or two structure fires, not hundreds burning at the same time.

Similar water pressure problems plagued the 1991 Oakland Hills Fire, which destroyed more than 3,000 homes, and two Ventura County fires that each burned more than 1,000 homes in 2017 and 2018

The problem extends beyond California. Texas saw the largest fire in its history last February. As population booms, more people are moving to areas at high risk of fires between dense developments and wildland. 

California is home to the top six cities at highest wildfire risk in the U.S., but Texas, Colorado and Oregon also have cities in the top 15.

A firefighting helicopter draws water from the first-ever installed Heli-Hydrant to quickly stop the Blue Ridge Fire in Yorba Linda, California, on October 28, 2020.

Yorba Linda Water District

There are three key components to making water systems more resilient, Pierce said: increasing water supply, improving local infrastructure, and bolstering power.

After a 2008 fire that destroyed 280 homes, Yorba Linda Water District in California addressed all three. It added backup generators at water pump stations that had failed during the fire, added a long-planned underground reservoir, and installed a first-of-its-kind water tank called a Heli-Hydrant.

That $70,000 tank can automatically refill itself and is reserved for helicopters to dip from, reducing the length of flight times between water pickups and drops. It was used to quickly stop the Blue Ridge Fire in 2020.

“Cal Fire was able to jump on it and use our Heli-Hydrant, trigger it and keep the fire to five acres,” said John DeCriscio, who was operations manager at the Yorba Linda Water District at the time. “That was a huge success.”

San Francisco implemented a comprehensive solution after the city was almost completely destroyed in the 1906 earthquake and resulting fire, which also caused most hydrants to run dry. 

In 1913, the city developed a unique fire-suppression water system separate from the rest of the city’s water. Seawater enters the system from 52 suction connections along the waterfront, and it’s pumped in from fireboats and two high-pressure pumping stations. There are more than 200 underground cisterns to store backup water. A high-elevation reservoir and two large-capacity tanks use gravity, not pumps, to feed special high-pressure emergency hydrants that can be seen around the city with black, red and blue tops.

There are other solutions that cities can implement.

A company called Rain is working on autonomous, unmanned aircraft for dropping water on fires. In Japan, an autonomous system of water cannons protects a cultural heritage site with 200-year-old thatched roof houses.

Cost is the main reason these solutions haven’t been implemented widely. 

“There’s always this delicate balance of being afraid to go to your customers and raise their rates, but if you don’t raise their rates, you can’t do these extra things,” said Marcus, the former state water board chair. “It’s the kind of thing that keeps you up at night when you manage one of these agencies.”

How firefighting planes and helicopters are battling the LA Fires

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MongoDB plummets 20% as weak outlook overshadows strong quarterly results

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MongoDB plummets 20% as weak outlook overshadows strong quarterly results

Dev Ittycheria, CEO of MongoDB

Adam Jeffery | CNBC

MongoDB shares cratered more than 20% after the database software maker shared weak guidance that signaled a slowdown in growth.

For the fiscal 2026 year, the company said it expects adjusted earnings to range between $2.44 to $2.62 per share and revenue of $2.24 billion to $2.28. Analysts were expecting EPS of $3.34 and $2.32 billion in revenue.

The weak guidance stems from slower growth in the company’s Atlas cloud-based database service. The revenue projection would imply 12.7% growth, the slowest for the company going back to its 2017 stock market debut.

Finance chief Srdjan Tanjga said during an earnings call that the company is seeing slower-than-expected growth in new applications harnessing its Atlas cloud-based database service. However, MongoDB is beefing up hiring and going after deals with larger companies.

Read more CNBC tech news

For the fiscal first quarter, MongoDB forecasted 63 cents to 67 cents in adjusted earnings per share on $524 million to $529 million in revenue. Analysts polled by LSEG had expected EPS of 62 cents and revenue of $526.8 million.

Citing MongoDB’s weak outlook and slowdown in growth, Wells Fargo analyst Andrew Nowinski downgraded shares to equal weight and lowered his price target.

“With a smaller pool of multi-year deals, we believe it will be difficult to significantly outperform expectations in FY26 and therefore expect shares to remain range-bound,” he wrote.

Read more of Nowinski’s analysis here.

MongoDB’s outlook offset stronger-than-expected fourth-quarter earnings. The company reported earnings of $1.28 per share, excluding items, on $548 million in revenue. Analysts polled by LSEG had anticipated EPS of 66 cents and $520 million in sales. Revenues rose 20% from a year ago.

MongoDB gained 1,900 customers in the quarter, reflecting a total of 54,500.

— CNBC’s Jordan Novet contributed reporting.

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Alibaba shares soar after Chinese tech giant unveils new DeepSeek rival

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Alibaba shares soar after Chinese tech giant unveils new DeepSeek rival

The Alibaba office building is seen in Nanjing, Jiangsu province, China, on Aug 28, 2024.

CFOTO | Future Publishing | Getty Images

Alibaba shares surged on Wednesday after the Chinese behemoth revealed a new reasoning model it claims can rival DeepSeek’s global blockbuster R1.

Hong Kong-listed shares of Alibaba ended the Thursday session up 8.39% — hitting a new 52-week high — with the company’s New York-trading stock rising around 2.5% in premarket deals. Alibaba shares have gained nearly 71% in Hong Kong in the year to date.

The Chinese giant on Thursday unveiled QwQ-32B, its latest AI reasoning model, which it said “rivals cutting-edge reasoning model, e.g., DeepSeek-R1.”

Alibaba’s QwQ-32B operates with 32 billion parameters compared to DeepSeek’s 671 billion parameters with 37 billion parameters actively engaged during inference — the process of running live data through a trained AI model in order to generate a prediction or tackle a task.

Parameters are variables that large language models (LLMs) — AI systems that can understand and generate human language — pick up during training and use in prediction and decision-making. A lower volume of parameters typically signals higher efficiency amid increasing demand for optimized AI that consumes fewer resources.

Alibaba said its new model achieved “impressive results” and the company can “continuously improve the performance especially in math and coding.”

Both established and emerging AI players around the world are racing to produce more efficient and higher-performance models since the unexpected launch of DeepSeek’s revolutionary R1 earlier this year.

Chinese firms have been doubling down on the technology with Alibaba investing in AI after debuting its first model in 2023. The strength of the company’s cloud Intelligence unit was a key contributor to Alibaba’s sharp profit hike in the December quarter.

“Looking ahead, revenue growth at Cloud Intelligence Group driven by AI will continue to accelerate,” Alibaba CEO Eddie Wu said at the time.

Optimism surrounding AI developments could lead to large gains for Alibaba stock and set the company’s earnings “on a more upwardly-pointing trajectory,” Bernstein analysts said.

“The pace of innovation is incredibly fast right now. It’s really good for the world to see this happening,” Futurum Group CEO Dan Newman told CNBC’s “Squawk Box Europe” on Thursday. “When DeepSeek came out, it made everyone sort of question, was OpenAi the final answer? Would the incumbents, the Microsofts, the Googles, or the Amazons that have all made massive investments win?”

He stressed that the large language models were increasingly “becoming commoditized” as developers look to drive down costs and improve access to users.

“As we see this more efficiency, this cost coming down, we’re also going to see use going off. The training era, which is what Nvidia really built its initial AI boom off, was a big moment,” Newman said. “But the inference, the consumption of AI, is really the future and this is going to exponentially increase that volume.”

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It’s ‘never been easier’ to become an online scammer as cybercrime markets flourish, security experts warn

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It's 'never been easier' to become an online scammer as cybercrime markets flourish, security experts warn

“Looking back to the 1990s and early 2000s, you needed to have a reasonable level of technical competence to pull off these types of crimes,” Nicholas Court, assistant director of Interpol’s Financial Crime and Anti-Corruption Centre, told CNBC.

Imaginima | E+ | Getty Images

An expanding network of cybercrime marketplaces is making it easier than ever to become a professional fraudster, posing unprecedented cybersecurity threats worldwide, experts warn.

Cybercriminals are often portrayed in popular media as rogue and highly skilled individuals, wielding coding and hacking abilities from a dimly lit room. But such stereotypes are becoming outdated. 

“Looking back to the 1990s and early 2000s, you needed to have a reasonable level of technical competence to pull off these types of crimes,” Nicholas Court, assistant director of Interpol’s Financial Crime and Anti-Corruption Centre, tells CNBC. 

Today, the barriers to entry have come down “quite significantly,” Court said. For example, obtaining personal data, such as email addresses, and sending them spam messages en masse — one of the oldest online scams in the book — has never been easier.

Cybersecurity experts say the change is due to advances in scam technology and the growth of organized online markets where cybercrime expertise and resources are bought and sold. 

A growing cybercrime economy 

“The last decade or so has seen an evolution of rogue cybercriminals into organized groups and networks all of which are part of a thriving underground economy,” said Tony Burnside, vice president and head of Asia-Pacific at Netskope, a cloud security company.

Driving that trend has been the emergence of global underground markets that offer “cybercrime-as-a-service” or “CaaS,” through which vendors charge customers for different types of malicious tools and cybercrime services, he added.

Examples of CaaS include ransomware and hacking tools, botnets for rent, stolen data, and anything else that may aid cybercriminals in their illicit activities.

“The availability of these services certainly helps in enabling more cybercriminals, allowing them to scale up and sophisticate their crime while reducing the technical expertise required,” Burnside said. 

CaaS is often hosted on markets in the “darknet” — a part of the internet that uses encryption technology to protect the anonymity of users.

Examples include Abacus Market, Torzon Market and Styx, though the top markets often change as authorities shut them down and new ones emerge. 

Burnside adds that the criminal gangs operating CaaS services and markets have begun to operate like “legitimate organizations in their structure and processes.”

Meanwhile, vendors on these illicit exchanges tend to accept payments only in cryptocurrency in attempts to remain anonymous, obscure proceeds and evade detection. 

Silk Road, an infamous dark web marketplace that was shut down by law enforcement in 2013, is recognized by many as one of the earliest large-scale applications of cryptocurrency.

Darknet emerges from shadows 

Though the use of cryptocurrencies in the cybercrime market can help obscure the identities of participants, it can also make their activities more traceable on the blockchain, according to Chainalysis, a blockchain research firm that traces illicit crypto transactions. 

According to Chainalysis data, while darknet markets remain a major factor in the global cybercrime ecosystem, more activity is moving to the public internet and secure messaging services like Telegram. 

The largest of those marketplaces identified by Chainalysis is Huione Guarantee — a platform affiliated with Cambodian conglomerate Huione Group — which the firm says acts as a “one-stop shop for nearly every form of cybercrime.”

The Chinese-language platform operates as a peer-to-peer marketplace where vendors offer services Chainalysis says are linked to illicit activity like money laundering and crypto-based scams.

Vendors pay to advertise on the Huione website, often directing interested parties into private Telegram groups. If a sale is made, Huione appears to act as an escrow and dispute intermediary to “guarantee” the exchange.

Chainalysis data shows that vendors on Huione Guarantee have processed a staggering $70 billion in crypto transactions since 2021. Meanwhile, Elliptic, another blockchain analytics firm, estimates that Huione Group entities have received at least $89 billion in crypto assets, making it “the largest ever illicit online marketplace.

The platform advertises and directs potential buyers to vendor groups on Telegram that offer everything from scam technology and money laundering to escort services and illicit goods. 

Judging from the scale and volume of the transactions on Huione Guarantee, it is likely leveraged by numerous organized criminal groups, according to Andrew Fierman, head of national security intelligence at Chainlaysis.

However, he adds that the many services don’t cost much money, providing a low barrier to entry and access point into cybercrime for “anyone with internet connection.” 

According to Chainalysis, individuals looking to facilitate “romance” or investment scams may be able to purchase the necessary tools and services on Huione for just a couple of hundred dollars. Costs can reach thousands of dollars, depending on the level of complexity they are looking to execute.

Investing or romance scams involve a fraudster building a relationship with a victim via social media or dating apps, intending to con them out of money through a sham investment opportunity.

A scammer attempting to pull off this type of scam might shop Huione Guarantee for a portfolio of potential victims’ data, such as phone numbers; old social media accounts that appear to be from real people; and AI-powered facial and voice manipulation software, which can be used by a scammer to digitally disguise themselves. 

Other vendors on the site offer services related to the creation of fake investment and gambling platforms. Fiermen says scammers often deceive victims into depositing money on such platforms.

In a disclaimer on its website, the platform says it does not participate in or understand its customers’ specific businesses and is responsible only for guaranteeing payments between buyers and sellers, according to a CNBC translation of the Chinese-language statement.

According to Fierman, Huione Guarantee’s activity appears to be concentrated in Cambodia and China, but there’s evidence that other platforms are emerging. 

‘Child’s play’

As CaaS and cybercrime markets continue to grow, the technology that is offered and leveraged by criminal vendors has also advanced, allowing more sophisticated scams on scale — with less effort, experts say. 

AI-generated deepfake videos and voice cloning are increasingly looking more real, with previously infeasible attacks now realistic thanks to generative AI advancements, according to Kim-Hock Leow, Asia CEO of cybersecurity company Wizlynx Group. 

Last year, Hong Kong police reported that a finance worker at a multinational firm had been tricked into paying out $25 million to fraudsters using deepfake technology to pose as the company’s chief financial officer in a video conference call.

“This would have been completely impossible to pull off just a few years ago, even for criminals with technical skills, and now it is a viable attack even for those without,” added NetSkope’s Burnside.

Meanwhile, cybersecurity experts told CNBC that AI tools can be used to enhance phishing and social engineering scams, helping to write more personalized and human-like messages. 

“It has become child’s play to create really convincing fake emails, audio notes, images or videos designed to scam and trick victims,” said Burnside, noting that dark variants of legitimate generative AI tools continue to find their way into dark markets. 

Prevention efforts

Because of the global and anonymous nature of CaaS vendors and cybercrime marketplaces, they are very difficult to police, cybersecurity experts told CNBC, noting that markets that are shut down often resurface under different names or are replaced.

For that reason, Interpol’s Nicholas Court says cybercrime isn’t the type of activity “you can arrest your way out of.” 

“The volume of criminality is going up so fast that it is actually harder for law enforcement to catch the same proportion of cybercriminals,” he said, adding that this calls for a significant focus on prevention and public awareness campaigns to warn about the rapid sophistication of scams and AI tools.

“Almost everybody receives scam messages these days. While it used to be enough to tell people not to send money to someone that refuses to video call, that’s not enough anymore.” 

On the enterprise level, Wizlynx Group’s Leow says that as cybercriminals become more tech- and AI-savvy, so must companies’ cybersecurity protocols.

For example, AI tools can be used to help automate security systems on the enterprise level, lowering the threshold for detection and accelerating response times, he added.

Meanwhile, new tools are emerging, such as “dark web monitoring,” which can track cybercrime markets and underground forums for leaked or stolen data, including credentials, financial data, and intellectual property.

It’s “never been easier” to commit cybercrime, so it’s crucial to prioritize cybersecurity by investing in technological solutions and enhancing employee awareness, Leow said. 

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