Security researchers at Kaspersky say they have identified a malicious backdoor planted in the popular and long-running Windows disc imaging software, Daemon Tools. 

The Russian cybersecurity company said on Tuesday that data collected from computers around the world running the Kaspersky antivirus software shows a “widespread” attack is under way, targeting thousands of Windows computers running Daemon Tools.

The hackers, whom Kaspersky has linked to a Chinese-language speaking group based on an analysis of the malware, used the backdoor in Daemon Tools to plant additional malware on a dozen computers across the retail, scientific and manufacturing sectors, as well as government systems. Kaspersky said the hacking of these specific computers implied a “targeted” effort. 

The company said the targeted organizations are located in Russia, Belarus, and Thailand.

Kaspersky said the backdoor was first detected on April 8.

Kaspersky said it had contacted Disc Soft, the company that maintains Daemon Tools, but did not say if the developer responded or took action. Kaspersky said the supply chain attack is “still active,” suggesting that the hackers can still plant malware on thousands of computers running the disc imaging software.

This is the latest in a string of so-called “supply chain” attacks that have targeted developers of popular software in recent months. Hackers are increasingly taking aim at the accounts of developers who work on widely used code and software, and abusing that access to push malicious code to anyone who relies on the software. This approach lets the hackers break into a large number of computers at once when their malicious code is delivered as a software update.

Earlier this year, hackers associated with the Chinese government hijacked the popular text editing software Notepad++ to deliver malware to a number of organizations with interests in East Asia. Security researchers also warned of another attack last month targeting users who visited the website of CPUID, which makes the popular HWMonitor and CPU-Z tools.

TechCrunch downloaded the Windows installer from Daemon Tools’ website, and the file appeared to contain the backdoor when we checked it with the online malware scanner service VirusTotal.

It’s not known if the macOS version of Daemon Tools was compromised, or if other apps made by Disc Soft are affected.

When contacted for comment, a Disc Soft representative said they are “aware of the report and are currently investigating the situation.”

“Our team is treating this matter with the highest priority and is actively working to assess and address the issue. At this stage, we are not in a position to confirm specific details referenced in the report. However, we are taking all necessary steps to remediate any potential risks and to ensure the security of our users,” the representative said.

Do you know more about the cyberattack targeting Daemon Tools users? Did you receive an antivirus alert saying you were affected? We want to hear from you. To contact this reporter securely, reach out via Signal username zackwhittaker.1337.

Etsy announced Tuesday the launch of its native app within ChatGPT, opening up a new way for shoppers to explore its catalog of over 100 million listings.

The new experience is designed to move beyond the limitations of traditional keyword queries. Instead of typing something like “wooden coffee table,” then scrolling and adjusting filters, users can now express what they’re looking for in natural language. For instance, “Help me find a Mother’s Day gift under $100 for my mom who loves gardening.”

Now live in beta, the feature allows users to tag @Etsy directly within a prompt. From there, the Etsy app in ChatGPT surfaces relevant product listings that users can browse, compare, and click through to Etsy for additional details or purchase.

This isn’t Etsy’s first experiment inside ChatGPT. Back in September, Etsy became an early partner in ChatGPT’s Instant Checkout integration, which let users buy products directly inside the chat interface. However, the initiative ended in March, suggesting it didn’t perform as OpenAI had hoped. It was reported that Etsy didn’t see a large volume of sales from the integration, leading Etsy to start building a native app within ChatGPT instead. 

Alongside this launch, Etsy also revealed it’s testing a beta conversational search experience within its platform, specifically geared toward helping users find gifts. The gift assistant acts as a personal shopper, offering a guided, conversational way to discover ideas, narrow down preferences, and surface relevant products.

This builds on Etsy’s broader AI push, which includes an AI-powered discovery experience featuring curated collections and a suite of seller tools, including a tool that helps generate product titles and descriptions, as well as a writing assistant to help draft messages to buyers. In 2024, Etsy introduced a new “Designed” label to identify AI content, part of an effort to increase transparency as AI-generated artwork becomes more prevalent on the platform.

The news of a ChatGPT integration comes a week after Etsy reported its Q1 2026 earnings, surpassing revenue expectations with $631 million, and marketplace gross merchandise sales were up 6% year over year. Notably, active buyers increased for the first time in two years to 86.6 million. Etsy also touted 5.6 million active sellers on the platform. 

In February, the company announced it was selling Depop to eBay for $1.2 billion in cash, a move aimed at doubling down on its core marketplace.

Etsy joins a growing list of companies building native apps within ChatGPT, including Angi, SeatGeek, Tubi, and Wix. Developers have been able to build apps within the chatbot since October.

PayPal is looking toward the future, despite its falling stock and looming layoffs. In its first-quarter earnings call, CEO Enrique Lores told investors that PayPal needs to “recommit to the fundamentals,” which included “becoming a technology company again.”

There was no need to read between the lines — PayPal was pitching an AI-powered turnaround.

Lores explicitly said so, telling analysts on this week’s call that leading companies find ways to differentiate themselves by innovating and that now is the time for PayPal to take action. This includes modernizing its tech platform, moving faster to become “cloud-native,” and “aggressively adopting AI in our development processes,” Lores said. The latter would increase developer productivity and shorten time to market, he added.

It’s a startling admission from PayPal that it has yet to fully embrace AI in-house, when AI-assisted coding is one of the breakout areas where the technology has truly excelled.

Other consumer tech companies have rapidly adopted AI in recent months to assist with coding, with Spotify even declaring in February that its top developers haven’t written a line of code since December. Meanwhile, top dev teams are trying to outcompete one another by tokenmaxxing — a proxy for understanding who at the company is experimenting with AI more often, based on the number of AI tokens they use.

PayPal is only now catching up, it seems.

Lores said the company has formed a new “AI transformation and simplification” team to help with its enterprise AI agenda. Combined with the planned layoffs, which Lores characterized as PayPal removing layers from its organizational structure, the addition of AI-enabled processes is expected to bring the company at least $1.5 billion in cost savings over the next two to three years, he said.

The company announced last week it was reorganizing its business, which streamlines the operation into three segments: checkout solutions and PayPal, consumer financial services (and Venmo), and payment services and crypto. In addition, Bloomberg reported on Tuesday that PayPal plans to cut around 20% of its workforce over the next two to three years as part of its cost-savings plan, equating to north of 4,500 jobs.

More cost savings will come from PayPal’s plans for AI adoption, company execs said on the call. That includes bringing AI into areas beyond coding, like customer service, support operations, and risk management, to name a few.

“I think the changes that AI will enable us to do are … going to be very significant,” said Lores. “This is why we created a group last week, reporting to me, that is going to be in charge of driving — function by function, process by process — this AI transformation. And this is not about adopting AI as a technology, where we have done many pilots in the company, and we have seen what is possible. It’s really about understanding how can we redesign the key processes … this is what we have seen that really will drive significant savings.”

Announcing an AI-driven push to cut costs while eliminating thousands of jobs underscores a core criticism of the technology — it comes with a human cost.

It’s worth noting that, in this case, PayPal was already in need of restructuring. The company may have beat on its first-quarter earnings with revenue of $8.4 billion, up 7% year-over-year, but it forecast weak guidance for the second quarter, sending the stock tumbling after earnings. That follows a long post-pandemic decline that has sent the stock down over 80% from its 2021 high and has stunted PayPal’s growth.

Asked if separating Venmo into its own business meant the company would be open to selling it, Lores said that, for now, this is what made the most sense in terms of the turnaround plan. Still, he signaled openness to future deals by saying “my number one priority is to maximize shareholder value,” in answer to an analyst’s question about a sale.