2,250 tenants targeted by AI hackers in rapid supply chain strike

A new wave of cyberattacks has turned the tables on defenders by leveraging artificial intelligence to strike with unprecedented speed and scale. In a massive supply chain assault, a group known as Storm-0940 exploited a popular management platform to infiltrate more than 2,250 Microsoft 365 tenants. The operation relied on stolen application credentials, allowing the attackers to bypass interactive sign-ins and move directly into sensitive areas of corporate networks. This shift toward automated, AI-driven intrusion marks a significant escalation in how state-aligned hackers are targeting business infrastructure.

The core of this operation involved the use of ARTEX, an open-source framework that drives autonomous penetration testing agents. Microsoft noted that these large language model driven agents accelerated every phase of the attack, from initial scanning to credential abuse. The system required minimal human oversight, enabling continuous operations that left security teams with very little time to detect and react. This efficiency allowed the attackers to sweep through targets in a matter of hours rather than days.

One of the most alarming aspects of the campaign was the sheer volume of automated password guessing. The group launched a spray attack against 327 accounts across eight organizations, resulting in over 151,000 failed logons. At its peak on October 11, the system attempted 2,900 logins per minute. Although nearly 98 percent of these attempts were locked out, the high frequency of failures created a significant burden on security monitoring systems and highlighted the brute-force capabilities of the new AI tools.

The attackers did not stop at failed logins. Using four specific application credentials, the AI agents executed more than 200 successful sign-ins in under four minutes. This rapid entry allowed them to perform directory operations, reconnaissance, and changes to privileged roles within the affected tenants. In one notable instance on October 15, security firm Huntress observed an application assigning itself the top administrator role. This action, which triggered specific alerts, also involved planting new secrets designed to expire in 2028, a tactic intended to maintain long-term access.

Storm-0940 has been active since 2021 and is described as a China-state aligned actor with no known industry aliases. The group targeted 14 industries, including aerospace, defense, semiconductor, government, and think tanks. Microsoft clarified that the attack did not stem from a vulnerability in its own systems, but rather from the compromise of the ConnectWise platform. The activity was detected through sign-in patterns that moved through tenants in sorted order, suggesting the use of a script working from a predefined target list.

The broader context reveals that ARTEX is not a one-off tool. Threat actors in multiple regions are adopting this technology, with recent reports linking it to breaches at South Korean financial institutions. CrowdStrike indicated that the suspect in those cases likely used ARTEX with a different AI model. In response to the growing threat, the developer of ARTEX, known as Autumn-27, announced that the project would stop receiving updates and transition to closed source. This move aims to limit the tool's accessibility to other potential attackers.

ConnectWise has suspended several of its services, including Cloud Backup and SaaS Security, as a precautionary measure. The company has begun a phased restoration process, with recovery expected to take several days. While there are no current indicators that partner backup data was compromised, Microsoft advises customers to keep affected app connections disabled until formal instructions are issued. The incident underscores the urgent need for organizations to review their recent activity logs and understand the evolving risks posed by autonomous cyber tools.