Cloud hosting provider Railway says hackers exploited vulnerabilities in its infrastructure to steal customer authentication secrets and generate approximately $740,000 in fraudulent AI usage, potentially exposing credentials for up to 100,000 workspaces.

The company disclosed the incident on October 22, warning customers to rotate their secrets after detecting unauthorized access to systems storing environment variables.

In a new incident report published today, Railway confirms that attackers gained access to its internal source code and the decrypted customer environment variables for at most 1.85% of its workspaces, or approximately 100,000.

The company says this figure represents the maximum number of potentially impacted workspaces, rather than the confirmed number whose secrets were stolen.

The attack began on October 20, when hackers exploited a previously unknown vulnerability in Railway's build infrastructure to escape filesystem isolation and obtain an internal credential.

The attackers used the credential to access stored build histories and retrieve a copy of Railway's internal source code, which they then analyzed to identify additional ways to compromise the platform.

The attackers then exploited a second vulnerability involving an improperly configured trust relationship to gain further access to Railway's infrastructure and obtain credentials used to decrypt customer environment variables.

Railway says the attack became a roughly 26-hour battle between its engineers and threat actors using AI-powered agents to identify and exploit vulnerabilities across its infrastructure. At the same time, defenders worked to secure the systems.

"This was not a single breach followed by a single fix. The attacker probed many potential routes, in parallel, with Railway similarly hardening the routes in parallel," Railway said.

"The escalating situation became a contest of agent speed, with Railway defending against abliterated models and a harness similar to ARTEX, according to Wiz."

Railway says its investigation found that the attackers specifically searched for AI provider credentials, although some queries also targeted cloud, database, and payment service credentials.

The stolen credentials were subsequently used to generate approximately $740,000 in unauthorized AI usage, with Railway working with affected providers to reimburse customers. The company says it will cover charges that providers decline to refund.

The breach also exposed linked-account tokens belonging to 1,852 users, including GitHub OAuth tokens and AI agent keys. Railway says it reset those tokens and notified affected users.

Railway believes the attackers were focused on stealing AI credentials for resale or use in AI model distillation, linking the incident to a recent wave of attacks against AI developer platforms that security firm Wiz has dubbed "Black October."

This campaign has targeted numerous AI development platforms during the past month, including Northflank, OpenCode, Warp, and Lightning AI.

The company says the attackers were fully removed from its systems on October 21 and that all exploited vulnerabilities have since been remediated.

Railway also found no evidence that the hackers downloaded customer Git repositories or accessed customer databases.

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