By Hamza Faisal

Microsoft says a China-aligned espionage crew has pulled off one of the most automated supply-chain attacks ever seen — breaking into IT giant ConnectWise's cloud backup service, stealing application credentials, and then turning AI agents loose on around 2,250 customer organizations, reading emails and files at a speed that gave defenders "little time to detect and respond."

The attackers, tracked by Microsoft as Storm-0940 and active since at least 2021, compromised ConnectWise Cloud Backup — a service IT providers use to back up their clients' Microsoft 365 and Google Workspace data. With the stolen application credentials in hand, the hackers could sign in to customers' Microsoft-hosted environments as if they were authorized users, with no user sign-in involved at all.

AI agents did the breaking and entering

What made this campaign different, Microsoft says, was the automation. Storm-0940 used ARTEX, an open-source AI penetration-testing framework, to automate everything from reconnaissance and vulnerability discovery to password spraying and data theft. Between October 10 and 14, a single Storm-0940 server racked up more than 151,000 failed sign-in attempts against 327 accounts at eight organizations — and that was just the warm-up.

Once the group controlled the identities of several ConnectWise cloud apps, the AI agents went to work on the stolen credentials, attempting to sign in to more than 2,250 tenants at a rate of almost 3,000 attempts per minute. In some cases, Microsoft says, the time from initial targeting to privileged cloud access was under three hours. One detection alert described a compromised app granting itself the Global Administrator role.

The same AI tool has struck before

Microsoft notes this was not ARTEX's first outing. The same open-source framework was used in a recent compromise of South Korea's financial systems, many of which had weak security and lacked multi-factor authentication. Microsoft assesses that Storm-0940 began using ARTEX as early as September, targeting organizations across aerospace, defense, energy, financial services, government, manufacturing, and more — including government agencies, defense contractors, and banks.

"This activity demonstrates how threat actors are integrating agentic AI into existing offensive security workflows and allows them to scale their operations exponentially," Microsoft said in its report. The company stressed the activity did not result from a compromise of or vulnerability in its own systems, products, or services.

ConnectWise hits pause

ConnectWise said it has paused access to its Cloud Backup, SaaS Security, and Cloud Management services after discovering unauthorized access to application identities, and is investigating while working to restore service. The vendor did not initially identify who was responsible; Microsoft's report is what pinned the intrusion on Storm-0940, a crew that has traditionally relied on password spraying and OAuth application abuse but this time let AI do the heavy lifting.

For IT providers and the businesses that trust them with backups, the campaign is a stark warning: a single compromised vendor credential, amplified by tireless AI agents, can open the door to thousands of tenants in hours.

By Hamza Faisal