AI hackers breached 2,250 business networks in under three hours

More than 2,250 Microsoft 365 tenants faced attempted sign-ins from a coordinated cyberattack that leveraged artificial intelligence to break through defenses at an unprecedented speed. According to Microsoft’s security team, a group known as Storm-0940 exploited unauthorized access to the ConnectWise platform, using stolen application credentials to authenticate without requiring interactive user logins. The scale of the operation was massive, with the attackers targeting over two thousand distinct business environments in a single wave.

The most alarming aspect of the intrusion was its velocity. In several instances, the group gained privileged access to victim networks in less than three hours after initial targeting. This rapid escalation was driven by the use of ARTEX, an open-source framework that employs large language models to run autonomous penetration tests. These AI agents operated continuously with minimal human input, accelerating scanning, reconnaissance, and the abuse of OAuth applications to a pace that left defenders with very little time to react.

Storm-0940, a China-state-aligned actor active since 2021, targeted a specific set of high-value industries, including aerospace and defense, semiconductors, government entities, and think tanks. Fourteen industries in total were listed as targets. Microsoft clarified that the attack did not stem from a vulnerability in its own systems or products, but rather from the compromised third-party application. It remains unclear how the initial ConnectWise credentials were stolen or exactly how many tenants were fully compromised.

Beyond the direct application attacks, the group engaged in extensive password spraying, targeting 327 accounts across eight organizations. This campaign resulted in more than 151,000 failed logon attempts with no recorded successes. At its peak on October 11, the password spray generated 2,900 attempts per minute, totaling over 111,000 failures that day. While 98% of these attempts were locked out, the simultaneous use of stolen app credentials allowed the AI agents to sign into customer tenants from the same IP range, executing over 200 sign-ins in under four minutes using just four sets of credentials.

Within the compromised tenants, the attackers performed directory operations, reconnaissance, and changes to app credentials and privileged roles. In one specific case on October 15, security firm Huntress observed an application adding itself to the top administrator role. This action triggered a Microsoft Defender alert regarding self-assigned Global Administrator roles and involved planting new secrets set to expire in 2028. By October 16, Huntress confirmed unauthorized sign-ins for 162 tenants, a number that surged to nearly 1,000 Entra tenants by the following day, with more than 300 sign-ins succeeding.

The methodical nature of the attack was evident in the sorted order of tenant sweeps, which occurred just seconds apart, suggesting a script working from a predefined target list. This incident highlights a shift in cyber warfare tactics, as threat actors in various regions are increasingly adopting AI-driven frameworks like ARTEX. Public reports this month have linked similar breaches at South Korean financial institutions to the same technology, with one suspect allegedly using ARTEX alongside Anthropic’s Claude Code. In response, the developer of ARTEX announced that the project would become closed source and cease updates.

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, expecting recovery to take several days, and has not yet found indicators that partner backup data was compromised. Microsoft advises customers to keep affected app connections disabled until formal restoration instructions are issued and to review activity logs from this month to assess potential exposure. The incident underscores the growing efficiency of AI agents in executing complex supply chain attacks.