Microsoft Links ConnectWise Cloud Backup Attack to China-Aligned Group Using AI Agents

Microsoft researchers have attributed the recent supply-chain attack on ConnectWise customers' Microsoft 365 environments to Storm-0940, a China-state aligned threat group active since 2021. Microsoft says the group used an agentic AI penetration testing framework called ARTEX to automate attacks on hundreds of organisations worldwide. Targets spanned many sectors, including aerospace and defence, energy, financial services, government, legal, manufacturing, software, think tanks and non-profits.

Shortly before the ConnectWise Cloud Backup compromise, Storm-0940 ran a password-spraying campaign that ultimately failed. Over four days ending 14 October, it targeted 327 Microsoft 365 and Exchange Online accounts across eight organisations. Microsoft saw more than 151,000 failed logon attempts, peaking at 2,900 failures per minute. The next day, the group turned to ConnectWise, using AI agents and the same malicious infrastructure to compromise a series of Cloud Backup customers' Microsoft 365 environments.

According to Microsoft, ARTEX sped up scanning, password spraying and the abuse of OAuth applications in downstream victims. In some environments, the AI agents went beyond logging in, carrying out reconnaissance, changing application credentials to maintain access, and altering identities, groups and privileged roles. Microsoft said this shows how a compromised third-party application with high privileges can give access well beyond its intended purpose. It also noted that multiple threat actors from various regions are using ARTEX to increase the speed of their attacks.