Storm-0940 Uses AI Agents to Breach 2,250 Microsoft Tenants via ConnectWise

A sophisticated cyberattack is sweeping through major U.S. infrastructure as China-aligned hackers leverage artificial intelligence to breach thousands of corporate accounts. The operation, attributed to the group known as Storm-0940, represents a significant shift in how state-sponsored actors conduct digital espionage.

Microsoft reports that the group utilized an open-source AI framework called ARTEX to execute a large-scale supply chain attack on ConnectWise. After gaining unauthorized access to this multi-tenant application, the attackers attempted sign-ins at more than 2,250 Microsoft 365 tenants. They used stolen ConnectWise app credentials to authenticate as the applications themselves, bypassing the need for interactive user sign-ins. In several instances, the AI agents reached privileged access levels less than three hours after the initial targeting of the victims.

The speed and automation of the attack left defenders with minimal time to react. The ARTEX framework, described by Microsoft as a system of LLM-driven agents, runs autonomous penetration tests with little human intervention. This allowed the group to accelerate scanning, reconnaissance, and the abuse of OAuth applications. The automated process also included password spraying, which targeted 327 accounts across eight organizations. This specific tactic resulted in more than 151,000 failed logons, though no successful password guesses were recorded in that phase.

The scope of the operation was vast, targeting 14 industries including aerospace, defense, semiconductors, government, and think tanks. At its peak on October 11, the password spray campaign engaged in 2,900 failed attempts per minute. By the end of that day, there were more than 111,000 failures, with 48 accounts logging over 1,000 failed attempts each. Nearly 98 percent of this activity resulted in lockouts, but the attackers pivoted to using the stolen ConnectWise app credentials to sign in from the same IP range.

Within four minutes, the agents executed more than 200 sign-ins using just four application credentials. Once inside, the agents performed directory operations, reconnaissance, and changes to identities and privileged roles. On October 15, the security firm Huntress observed an app in one tenant adding itself to the top administrator role. This action triggered a Microsoft Defender alert regarding an application self-assigning the Global Administrator role. The attackers also planted new secrets set to expire in 2028.

By October 16, Huntress confirmed unauthorized sign-ins for 162 tenants. The next day, that number rose to almost 1,000 Entra tenants with sign-in activity from the attacking IP, with more than 300 of those sign-ins succeeding. The sweep through tenants occurred in sorted order, with actions separated by only seconds, indicating a script working from a pre-defined target list. Microsoft clarified that the activity did not stem from a vulnerability in its own systems or products.

The use of ARTEX distinguishes this incident from many traditional attacks. The framework can utilize any AI model, and other threat actors in multiple regions are reportedly using it. Public reports this month linked the tool to breaches at South Korean financial institutions, where CrowdStrike suggested the suspect was based in China and used ARTEX with Anthropic’s Claude Code. The developer of ARTEX, who goes by the handle Autumn-27, announced on GitHub that the project would no longer be updated and would become closed source.

ConnectWise has suspended its Cloud Backup, SaaS Security, and Cloud Management services as a precaution. The company has begun a phased restoration process, with recovery expected to take several days. So far, there are no indicators that partner backup data was compromised. Microsoft advises customers to keep affected app connections disabled until formal instructions are issued and to review activity logs from this month where possible.

Questions remain regarding how the initial ConnectWise credentials were stolen and exactly how many tenants were fully compromised. The incident highlights the growing speed and autonomy of AI-driven cyber threats, forcing organizations to rethink their defense strategies against agents that operate without human fatigue or delay.