2,250 Tenants Targeted in AI-Driven Supply Chain Attack
Microsoft attributes a massive intrusion to a Chinese state-aligned group using an autonomous AI framework to exploit stolen credentials and breach hundreds of business accounts.
By Jonathan Hoffmann ·
Microsoft has linked a significant supply chain attack to Storm-0940, a threat group aligned with the Chinese state. The operation targeted more than 2,250 Microsoft 365 tenants. The attackers used a multi-tenant ConnectWise application as their entry point. This move allowed them to bypass standard user login processes entirely.
The group relied on ARTEX, an open-source framework designed for agentic AI penetration testing. Microsoft describes it as a system of large language model driven agents. These agents perform autonomous scanning and reconnaissance tasks. They also handle password spraying and the abuse of OAuth applications with minimal human oversight.
The attackers utilized stolen credentials belonging to specific ConnectWise apps. This allowed them to authenticate as the applications themselves. No interactive user sign-in was required for these actions. It is currently unclear how the initial credentials were stolen. The total number of tenants fully compromised remains unknown at this time.
The campaign targeted fourteen different industries. These included aerospace, defense, semiconductors, government agencies, and think tanks. Microsoft clarified that the attack did not stem from a vulnerability in its own systems. The activity was external to its core products and services.
A separate password spraying effort hit 327 accounts across eight organizations. This generated over 151,000 failed logon attempts. Not a single attempt succeeded. The peak activity occurred on October 11. At that time, the system recorded 2,900 attempts per minute. Nearly 98% of this traffic resulted in account lockouts.
The identity takeover proved more effective than the spraying campaign. Using four application credentials, the AI agents signed into customer tenants. They recorded more than 200 sign-ins in under four minutes. The agents performed directory operations and changed privileged roles within some tenants. They moved through the list in sorted order, seconds apart.
Security firm Huntress observed specific behaviors that triggered alerts. On October 15, one app added itself to the Global Administrator role. The attackers planted new secrets set to expire in 2028. By October 16, Huntress confirmed unauthorized sign-ins at 162 tenants. A day later, the count rose to almost 1,000 Entra tenants with activity from the attacking IP.
ConnectWise detected the breach and suspended several services as a precaution. This included Cloud Backup, SaaS Security, and Cloud Management. The company has begun a phased restoration process. It expects the work to take several days. There are no current indicators that partner backup data was compromised.
Microsoft advises customers to keep affected app connections disabled. This should continue until formal restoration instructions are issued. Users should review activity logs from this month where possible. A successful sign-in does not automatically mean data was accessed or taken. The situation remains under active investigation.
