Storm-0940 Uses AI Agents to Sweep 2,250 Microsoft Tenants in Rapid Supply Chain Breach

More than 2,250 Microsoft 365 tenants faced attempted sign-ins from a coordinated cyberattack that exploited the ConnectWise platform. This massive sweep was executed by a China-state-aligned group known as Storm-0940. The operation utilized an open-source artificial intelligence framework to accelerate the intrusion process. Microsoft detailed the incident in a recent security blog post.

The attackers employed ARTEX, an agentic AI penetration testing system, to streamline reconnaissance and password spraying. By using stolen ConnectWise application credentials, the agents authenticated without interactive user sign-ins. This allowed them to move through the multi-tenant application with speed and precision. Some of these attacks reached privileged access levels in less than three hours after initial targeting began.

Automated password guessing targeted 327 accounts across eight organizations. This effort generated more than 151,000 failed logons, though none were successful. The system engaged in 2,900 attempts per minute at its peak on October 11. Almost 98% of this activity resulted in account lockouts. Despite the high volume of failures, the AI agents operated continuously with minimal human interaction.

With control over multiple ConnectWise cloud app identities, the agents signed into customer tenants from the same IP range. They achieved more than 200 sign-ins in under four minutes using just four application credentials. Operations within these tenants included directory reconnaissance and changes to app credentials. Attackers also modified identities, groups, and privileged roles in several locations.

Huntress, a security firm, observed an app adding itself to the top administrator role in one tenant on October 15. This action triggered a Microsoft Defender alert for self-assigned global administrator roles. The group also planted new secrets set to expire in 2028. By October 16, Huntress confirmed unauthorized sign-ins for 162 tenants. By the next day, nearly 1,000 tenants showed sign-in activity from the attacking IP, with over 300 succeeding.

The attack pattern, which swept through tenants in sorted order seconds apart, suggested a script working from a target list. Storm-0940 has been active since 2021 and targets industries including aerospace, defense, semiconductors, and government. Microsoft clarified that the breach did not stem from a vulnerability in its own systems or products.

ConnectWise suspended Cloud Backup, SaaS Security, and Cloud Management as a precaution. A phased restoration process has begun, with recovery expected to take several days. The company reports no current indicators that partner backup data was compromised. Microsoft advises customers to keep affected app connections disabled until formal instructions are issued.

The use of ARTEX marks a shift from traditional manual attacks. The framework can utilize various AI models and is being used by threat actors in multiple regions. The developer of ARTEX, known as Autumn-27, announced on GitHub that the project would become closed source and stop receiving updates. This development follows public reports linking the tool to breaches at South Korean financial institutions.