Microsoft Blames Chinese Group for AI Powered Breach of ConnectWise

The tension in the current cybersecurity landscape has reached a new peak. Microsoft has identified a sophisticated supply chain attack that targeted a major IT management platform. The company attributes the intrusion to Storm 0940, a threat actor aligned with the Chinese state. This group utilized an open source artificial intelligence framework known as ARTEX to streamline the attack. The result was a rapid compromise of a multi tenant application that served thousands of businesses.

The timeline of this incident reveals how quickly modern tools can change the game. The attackers first gained unauthorized access to a ConnectWise application. They then attempted sign in operations at more than 2,250 Microsoft 365 tenants. In some cases, the intrusions reached privileged access levels in less than three hours. This speed is largely due to the use of stolen credentials that belonged to the apps themselves. This allowed the attackers to authenticate without needing interactive user sign in.

Microsoft describes ARTEX as a system of large language model driven agents. These agents run autonomous penetration tests around the clock. The framework sped up scanning, reconnaissance, and password spraying. It also facilitated the abuse of OAuth applications. Because these agents operate with little human involvement, defenders have very little time to detect and respond to the activity. This efficiency is what made the campaign so effective.

Storm 0940 has been active since 2021 and has no known industry aliases. The group targeted fourteen industries in total. These sectors included aerospace and defense, semiconductors, government, and think tanks. Microsoft stressed that the activity did not stem from a vulnerability in its own systems or products. The issue lay in the third party application that connected to their platform.

A parallel effort focused on password spraying. This campaign targeted 327 accounts across eight organizations. It produced more than 151,000 failed logons but no successes. On October 11, the peak of this activity saw 2,900 attempts per minute. Almost 98% of that activity resulted in account lockouts. While this effort was noisy, it did not lead to direct compromises in the same way the identity takeover did.

The more effective tactic involved the takeover of several ConnectWise cloud apps. Using four application credentials, the AI agents signed in to customer tenants from the same IP range. They recorded more than 200 sign in operations in under four minutes. Within some tenants, they performed directory operations and changed app credentials and privileged roles. This allowed them to establish a foothold in the environment.

Security firm Huntress observed specific behaviors that raised alarms. On October 15, an app added itself to the Global Administrator role in one tenant. This action triggered a Microsoft Defender alert. The attackers also planted new secrets set to expire in 2028. By October 16, Huntress confirmed unauthorized sign in activity at 162 tenants. A day later, the count rose to almost 1,000 tenants with activity from the attacking IP.

The use of a pentest framework that works with any AI model sets this campaign apart. Other threat actors in several regions are using the same tool. Public reporting this month linked ARTEX to breaches at South Korean financial institutions. CrowdStrike noted that the suspect in those attacks was likely based in China. The developer of ARTEX, known as Autumn 27, stated on GitHub that the project will no longer be updated and will become closed source.

ConnectWise detected the unauthorized access and suspended several services as a precaution. These included Cloud Backup, SaaS Security, and Cloud Management. The company has begun a phased restoration process expected to take several days. It reports no indicators that partner backup data was compromised. Microsoft advises customers to keep affected app connections disabled until formal instructions are issued.