1st August 2025 Cyber Update: AI-Driven Attacks Target Australia and St. Paul Deploys National Guard After Digital Attack

Update: Aon has released Australia-specific findings from its 2025 Cyber Risk Report, revealing that Australian organizations face an unprecedented escalation in AI-enabled cyber attacks and third-party supply chain vulnerabilities. The report, published on July 31, 2025, highlights how traditional cybersecurity defenses are being outpaced by the speed and sophistication of AI-driven threats.

“AI is no longer a future threat—it’s a present-day reality,” said Adam Peckman, head of risk consulting and cyber solutions in APAC and global head of cyber risk consulting at Aon. “We’re seeing relatively unsophisticated actors now wielding tools that rival state-sponsored capabilities. The barrier to entry has dropped dramatically, and the velocity of attacks is only increasing.”

Noting that relatively unsophisticated actors now wield tools rivaling state-sponsored capabilities. The report documents the emergence of AI-powered social engineering attacks, including a $25 million theft from a UK engineering firm through deepfake-enabled scams that have since been replicated in Australia at smaller financial scales.

Why it Matters: This development marks a shift in cybersecurity threats, where the democratization of AI tools has lowered the barrier to entry for cybercriminals and significantly increased the speed of attacks. Australian businesses must recognize that their vendors and supply chain partners now form part of their own attack surface. Joerg Schmitz, Cyber Risk Quantification and Analytics Leader for APAC at Aon, warned that "organizations must start treating their vendors as part of their own attack surface."

The report's analysis of over 3,000 clients globally and more than 1,400 cyber events indicates that high-profile Australian breaches increasingly stem from third-party compromises, where attackers exploit weaker security standards in vendors with privileged access to client systems. This trend demands a complete rethinking of defensive strategies and vendor risk management practices.

Update: Minnesota Governor Tim Walz has activated the National Guard's cyber protection component to assist St. Paul after what Mayor Melvin Carter described as a "deliberate, coordinated, digital attack" by sophisticated external actors. The attack exceeded the city's response capacity, forcing officials to implement a complete shutdown of information systems as a defensive measure.

The incident has disrupted WiFi services across city buildings, suspended library operations, and compromised network resources. The city has engaged two cybersecurity firms and is working with the FBI to investigate the attack. Army Brigadier General Simon Schaefer confirmed that National Guard cybersecurity experts have deployed to provide specialized support.

Why it Matters: This incident marks a significant escalation in cyberattacks against U.S. municipal infrastructure, demonstrating how sophisticated threat actors can overwhelm local government defenses. The deployment of National Guard resources indicates the severity of the attack and sets a precedent for federal-state cooperation in cyber incident response.

The attack's impact on essential city services highlights the vulnerability of critical infrastructure and the potential for cyber incidents to disrupt public safety and emergency response capabilities. This case demonstrates the urgent need for enhanced cybersecurity investments at the municipal level and improved coordination between local, state, and federal authorities in cyber defense.