AI Agents: Supply Chain Attack Hits Global Firms

Businesses in the Great Lakes and Ohio Valley may face longer wait times for system recovery this week. A major software provider has paused several key services as a precaution. This follows a large-scale cyberattack that used new automated tools to test security defenses.

Microsoft identified a group called Storm-0940 as the source. This group is aligned with the Chinese state. They used an open-source framework named ARTEX. This system runs AI agents that perform penetration tests on their own. The agents worked with little human input. They scanned networks and guessed passwords at a rapid pace.

The attackers targeted a multi-tenant application known as ConnectWise. They used stolen credentials to sign in to over 2,250 Microsoft 365 tenants. The sign-ins did not require a person to log in manually. Some attacks reached privileged access in under three hours. This speed left defenders with very little time to react.

The group also used automated password guessing. They targeted 327 accounts across eight organizations. There were more than 151,000 failed login attempts. None of these guesses succeeded. The peak activity happened on October 11. At that time, the system made 2,900 attempts per minute. Almost 98% of these actions were locked out by security systems.

Despite the failed password guesses, the AI agents used stolen app credentials. They signed in to customer tenants from the same IP range. In one instance, they made more than 200 sign-ins in under four minutes. They used only four application credentials. Inside some tenants, the agents changed app credentials and modified user roles.

A security firm named Huntress observed specific actions on October 15. An app added itself to the top administrator role. This behavior triggered alerts in Microsoft Defender. The attackers also planted new secrets set to expire in 2028. By October 16, Huntress confirmed unauthorized sign-ins for 162 tenants. A day later, the number rose to almost 1,000 tenants with activity from the attacking IP.

The attack targeted specific industries. These include aerospace, defense, semiconductors, government, and think tanks. Microsoft stated that the issue did not stem from a vulnerability in its own systems. The use of ARTEX is notable because the tool is open-source. It can work with various AI models. Public reports this month linked similar tools to breaches at financial institutions in South Korea.

ConnectWise has suspended its Cloud Backup, SaaS Security, and Cloud Management services. It has begun a phased restoration process. Recovery is expected to take several days. The company does not see signs that partner backup data was compromised. Microsoft advises customers to keep affected app connections disabled until further notice. Users should review their activity logs from this month if possible.

It remains unclear how the initial credentials were stolen. Analysts also do not know how many tenants were actually compromised. The developer of ARTEX announced the project will no longer be updated. It will become closed source. This move may change how hackers deploy similar automated tools in the future.