Phantom Squatting Uses AI-Hallucinated Domains for Phishing and Malware

Attackers are utilizing a tactic called phantom squatting, where they purchase artificially generated domain names created by large language models before others can. These domains are then used to host phishing pages, targeting traffic redirected by AI tools. This method is already being observed in real-world scenarios, as reported by Palo Alto Networks' Unit 42. The technique exploits the ability of language models to invent non-existent web addresses.