Hackers use AI tools to breach thousands of business accounts via software flaw

Cybersecurity teams are increasingly facing adversaries who rely on artificial intelligence to accelerate the intrusion process. On October 23, Microsoft detailed a significant supply chain attack that utilized this emerging technology to target a wide range of U.S. organizations through a widely used business management platform.

The attack, attributed to a group known as Storm-0940, exploited unauthorized access to ConnectWise, a multi-tenant application. By leveraging stolen credentials for ConnectWise applications, the attackers bypassed standard interactive login procedures. This allowed them to attempt sign-ins across more than 2,250 distinct Microsoft 365 tenants. In several instances, the intruders secured privileged administrative access within three hours of initially targeting a victim.

To execute this rapid intrusion, the group employed ARTEX, an open-source framework designed for autonomous penetration testing. This system uses large language model-driven agents to perform scanning, reconnaissance, and password spraying with minimal human oversight. The agents operated continuously, significantly reducing the window available for defenders to detect and react to the ongoing breach.

The operation also involved aggressive automated password guessing, known as password spraying. This tactic targeted 327 accounts across eight organizations, resulting in more than 151,000 failed login attempts without any successful entries. At its peak on October 11, the system generated 2,900 failed attempts per minute, totaling over 111,000 for that day. Nearly 98% of these attempts were locked out, indicating a high volume of automated activity.

Storm-0940, identified as a China-state-aligned actor active since 2021, targeted industries including aerospace, defense, semiconductors, government, and think tanks. The attack did not stem from a vulnerability in Microsoft’s own systems but rather from compromised credentials in the third-party application. Once inside, the AI agents performed various operations, including changing application credentials, modifying user identities, and adjusting privileged roles within the directory.

Security firm Huntress observed specific behaviors in one tenant on October 15, where an application granted itself the top administrator role. This action triggered alerts in Microsoft Defender and involved planting new secrets set to expire in 2028. By October 16, Huntress confirmed unauthorized sign-ins for 162 tenants. The following day, nearly 1,000 tenants showed sign-in activity from the attacking IP range, with more than 300 of those sign-ins being successful.

The use of ARTEX marks a shift from traditional manual hacking methods. The framework, which can utilize various AI models, has been linked to other recent breaches, including those at South Korean financial institutions. The developer of ARTEX recently announced that the project would cease updates and transition to closed-source status, a move that may impact how threat actors utilize the tool in the future.

In response, ConnectWise suspended several of its cloud services as a precaution, including Cloud Backup and SaaS Security. The company has begun a phased restoration process, with full 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 official restoration instructions are issued and to review recent activity logs where possible.