AI Agents Breach 2,250 Firms via ConnectWise Supply Chain

A China-aligned hacking group has used artificial intelligence agents to launch a massive supply chain attack against more than 2,250 organizations. Microsoft identified the group as Storm-0940 and found that they exploited the ConnectWise platform to gain access to Microsoft 365 environments. The attackers moved with unusual speed, achieving privileged access in some cases within three hours of their initial entry.

The group utilized ARTEX, an open-source framework for agentic penetration testing. This tool allows large language models to run autonomous security tests. Microsoft explained that the system speeds up scanning, reconnaissance, and password guessing. It operates with minimal human interaction, creating a pace that leaves defenders little time to react.

The attack timeline began with unauthorized access to the multi-tenant ConnectWise application. The hackers then used stolen credentials to sign in as the application itself. This method bypassed the need for interactive user logins. In a separate effort, the group performed password spraying against 327 accounts in eight organizations. This generated over 151,000 failed login attempts without any successes.

Storm-0940 has been active since 2021 and does not have other known industry names. Their targets this time included sectors such as aerospace, defense, semiconductors, government, and think tanks. Fourteen specific industries were listed in the report. Microsoft clarified that the attack did not stem from a vulnerability in its own systems or products.

The peak of the password spray occurred on October 11. The group made 2,900 attempts per minute, totaling over 111,000 failures that day. Nearly 98 percent of these attempts were locked out. However, the AI agents successfully signed in to customer tenants using ConnectWise app credentials. They made more than 200 sign-ins in under four minutes using just four sets of application credentials.

Inside the compromised tenants, the agents performed various operations. These included directory changes, reconnaissance, and modifications to identities and privileged roles. On October 15, security firm Huntress observed an app assigning itself the top administrator role in one tenant. The group also planted new secrets set to expire in 2028. By October 17, almost 1,000 tenants showed sign-in activity from the attacking IP address.

Security experts note that this attack differs from traditional methods due to the use of AI agents. CrowdStrike linked the same tool to recent breaches at South Korean financial institutions. The developer of ARTEX stated that the project will no longer be updated and will become closed source. This shift may impact how other threat actors use the technology in the future.

ConnectWise has suspended its Cloud Backup, SaaS Security, and Cloud Management services as a precaution. The company has started a phased restoration process and expects recovery to take several days. There are currently no indicators that partner backup data was compromised. Microsoft advises customers to disable affected app connections and review recent activity logs until formal restoration instructions are issued.