ConnectWise Outage: AI Agents Hit 2,250 Microsoft Tenants

ConnectWise is currently suspending Cloud Backup, SaaS Security, and Cloud Management services while it restores systems after a supply chain attack. The company expects the phased restoration to take several days. It reports no indicators that partner backup data was compromised during the incident.

Microsoft attributes the breach to Storm-0940, a China-aligned threat group active since 2021. The attackers used stolen credentials for ConnectWise applications to authenticate without interactive user sign-ins. They leveraged ARTEX, an open-source agentic AI penetration testing framework, to automate scanning, reconnaissance, and password spraying. Microsoft describes ARTEX as a system of LLM-driven agents that run autonomous tests.

The group targeted more than 2,250 Microsoft 365 tenants. In some cases, attackers achieved privileged access less than three hours after initial targeting. They used four application credentials to sign in from the same IP range, recording over 200 sign-ins in under four minutes. The intruders performed directory operations, changed app credentials, and modified privileged roles within several tenants.

Huntress, a security firm, observed one tenant on Oct. 15 where an app assigned itself to the Global Administrator role. The attackers planted new secrets set to expire in 2028. By Oct. 16, Huntress confirmed unauthorized sign-ins at 162 tenants. A day later, it counted nearly 1,000 Entra tenants with activity from the attacking IP, with more than 300 successful logins. The attackers processed tenants in sorted order, seconds apart, indicating automated script execution.

A separate password-spraying campaign targeted 327 accounts across eight organizations. This effort generated over 151,000 failed logons with no successes. On Oct. 11, the peak rate reached 2,900 attempts per minute. Nearly 98% of this activity resulted in account lockouts. Microsoft stated the attack did not stem from a vulnerability in its own systems or products.

Storm-0940 targeted 14 industries, including aerospace, defense, semiconductors, and government. Microsoft advises customers to keep affected app connections disabled until formal restoration instructions are issued. The company also recommends reviewing activity logs from this month where possible. An affected app or successful sign-in does not necessarily mean data was accessed or taken.

ARTEX is a pentest framework that can work with any AI model. CrowdStrike linked the tool to breaches at South Korean financial institutions, alleging the use of Anthropic's Claude Code. Reuters reported that ARTEX developer Autumn-27 stated on GitHub that the project will become closed source and will no longer be updated.