2,250 Tenants Targeted: AI Agents Speed Up Major Supply Chain Breach

Storm-0940, a hacking group aligned with the Chinese state, recently launched a large-scale supply chain attack against ConnectWise that leveraged artificial intelligence to streamline its offensive operations. According to Microsoft, the threat actor utilized ARTEX, an open-source framework designed for autonomous penetration testing, to execute this campaign. This approach allowed the group to move faster than traditional human-led attacks, significantly compressing the timeline for initial breach and privilege escalation.

The scale of the operation was substantial. Using stolen credentials from ConnectWise applications, the attackers attempted sign-ins at more than 2,250 different Microsoft 365 tenants. These applications authenticated without interactive user logins, allowing the AI agents to operate continuously with minimal human oversight. In several instances, the group reached privileged access levels in less than three hours after first targeting a tenant, a pace that leaves defenders with very little time to detect the intrusion and respond.

Beyond application credential abuse, the group employed automated password guessing techniques. They sprayed 327 accounts across eight organizations, resulting in over 151,000 failed logon attempts, none of which were successful. At the peak of this activity on October 11, the system made 2,900 attempts per minute. While nearly 98% of these attempts resulted in account lockouts, the control over multiple ConnectWise cloud app identities allowed the attackers to sign in from the same IP range. Within four minutes, they executed more than 200 sign-ins using just four application credentials.

The targeted industries included aerospace and defense, semiconductor manufacturing, government agencies, and think tanks. Microsoft clarified that the breach did not stem from a vulnerability in its own systems or products. However, security firm Huntress identified specific malicious behaviors, such as an app adding itself to the top administrator role in one tenant. By October 16, Huntress had confirmed unauthorized sign-ins in 162 tenants, and by October 17, nearly 1,000 tenants showed sign-in activity from the attacking IP, with over 300 of those sign-ins succeeding.

The use of ARTEX marks a shift in how threat actors operate. The framework, which can utilize any AI model, is reportedly being used by groups in multiple regions. In South Korea, similar tools were linked to breaches at financial institutions. In response to the rising profile of this tool, ARTEX’s developer announced that the project would stop receiving updates and become closed source. Microsoft advises customers to keep affected app connections disabled until formal restoration instructions are issued and to review recent activity logs where possible.

ConnectWise has acknowledged the unauthorized access and suspended several of its services, including Cloud Backup, SaaS Security, and Cloud Management, as a precautionary measure. The company has begun a phased restoration process, with recovery expected to take several days. So far, there are no indicators that partner backup data was compromised. While an affected app or successful sign-in does not guarantee data was accessed or exfiltrated, organizations are urged to monitor their environments closely for any anomalies tied to this specific IP range and application behavior.