AI Hackers Hit 2,250 Companies Through One Software Glitch

A hacking group aligned with the Chinese state executed a massive supply chain attack by leveraging an open-source AI framework to infiltrate thousands of business networks. The group, identified as Storm-0940, utilized a tool called ARTEX to automate complex penetration testing tasks. This approach allowed them to bypass traditional security measures with speed and efficiency that left defenders with minimal time to react. The attack targeted the ConnectWise platform, a multi-tenant application widely used for cloud management and security services.

The scale of the operation was extensive, with the hackers attempting to sign into more than 2,250 different Microsoft 365 tenants. They achieved this by using stolen application credentials that did not require interactive user login. In some instances, the group reached privileged access levels within three hours of initial targeting. Additionally, automated password spraying campaigns targeted 327 accounts across eight organizations, resulting in over 151,000 failed login attempts, though none were successful.

Storm-0940 has been active since 2021 and targets specific industries, including aerospace, defense, semiconductors, government agencies, and think tanks. The group’s use of LLM-driven agents sped up reconnaissance and vulnerability scanning. These agents operate continuously with little human interaction, creating a relentless pressure on security teams. The activity did not stem from a vulnerability in Microsoft’s own systems but rather from the compromise of third-party application credentials.

At the peak of the attack on October 11, the password spray campaign recorded 2,900 attempts per minute. While nearly 98% of these attempts were locked out, the attackers successfully signed into customer tenants using four specific application credentials. In under four minutes, they recorded more than 200 sign-ins from the same IP range. Within affected tenants, the agents performed directory operations, changed app credentials, and modified privileged roles.

Security firm Huntress observed one tenant where an app added itself to the top administrator role on October 15. By October 16, the firm confirmed unauthorized sign-ins for 162 tenants. The following day, nearly 1,000 tenants showed sign-in activity from the attacking IP, with more than 300 succeeding. The systematic sweep of tenants in sorted order suggested a script working from a predefined target list.

ConnectWise suspended several of its services, including Cloud Backup, as a precaution. The company has begun a phased restoration process, with recovery expected to take several days. There are currently no indicators that partner backup data was compromised. Microsoft advises customers to keep affected app connections disabled until formal restoration instructions are issued and to review recent activity logs.

The use of ARTEX marks a shift in cyberattack methodology, as the framework can utilize any AI model. Other threat actors in different regions are also adopting this technology. The developer of ARTEX has announced the project will become closed source and will no longer receive updates. This development highlights the growing role of artificial intelligence in modern cyber warfare.