AI-Driven Attack on ConnectWise Shows How Fast Supply Chain Compromises Can Spread

Microsoft has attributed the compromise of Microsoft 365 tenants used by ConnectWise to a Chinese nation-state actor tracked as Storm-0940. The incident led the IT management software provider to take a number of its cloud services offline. Microsoft assessed that the group used an agentic AI penetration testing framework called ARTEX to target hundreds of organizations worldwide, across industries including defense, energy, financial services, government, legal, manufacturing and technology. In many cases, the group gained privileged access to cloud infrastructure in under three hours from initial targeting.

Storm-0940 has been active since 2021, and its main goal is data theft. It typically gains entry through password spraying and by exploiting internet-facing applications, then stays in place by adding credentials to existing OAuth applications. After accessing ConnectWise's multi-tenant application, the group used ARTEX to speed up scanning, password spraying and OAuth application abuse against ConnectWise's customers. It attempted sign-ins to more than 2250 tenants at 2900 attempts per minute, which Microsoft said leaves defenders little time to detect and respond.

Microsoft found multiple customer environments showing follow-on activity, including reconnaissance, changes to application credentials, and changes involving identities, groups and privileged roles. The AI agents kept using the same IP range and the stolen app credentials, exploiting the trust those apps already had within each tenant. ConnectWise acknowledged Microsoft's findings and the extensive use of AI in the attack in an update on October 21.