AI Agents Speed Up Supply Chain Intrusion

For many businesses across the Great Lakes and Ohio Valley, the recent weeks have brought a new layer of digital urgency. Security teams are now reviewing logs and disabling specific application connections to determine if their organization was touched by a sophisticated cyber intrusion. This disruption stems from a large-scale supply chain attack that exploited a popular business software platform to reach a vast number of corporate accounts.

The incident centers on the ConnectWise application, which was targeted by a group known as Storm-0940. Microsoft identified this actor as a China-state aligned entity active since 2021. The attackers utilized ARTEX, an open-source framework designed for autonomous penetration testing. By deploying AI-driven agents, the group accelerated the process of scanning systems, guessing passwords, and abusing application credentials. These agents operated continuously with minimal human oversight, a pace that left defenders with very little time to detect and respond to the intrusion.

The scale of the operation was significant. After gaining unauthorized access to the multi-tenant application, the group attempted sign-ins at more than 2,250 Microsoft 365 tenants. They used stolen ConnectWise application credentials to authenticate without requiring interactive user logins. In some instances, the attackers reached privileged access levels in less than three hours after initial targeting. The industries affected include aerospace, defense, semiconductor, government, and think tanks, with fourteen specific sectors listed in reports of the activity.

Background on the methods reveals a high volume of automated activity. Password spraying campaigns targeted 327 accounts across eight organizations, resulting in over 151,000 failed logon attempts. At its peak on October 11, the password spray generated 2,900 attempts per minute, all of which failed. Nearly 98 percent of this activity was locked out by security systems. However, the attackers also used four specific application credentials to sign in to customer tenants from the same IP range. More than 200 sign-ins were executed in under four minutes using these credentials.

Reactions from security firms have helped clarify the timeline and impact. Huntress, a security firm, observed an application adding itself to the top administrator role in one tenant on October 15. This behavior triggered alerts for applications self-assigning global administrator roles. 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, nearly 1,000 Entra tenants showed sign-in activity from the attacking IP, with more than 300 of those sign-ins succeeding.

The pattern of the attack suggests automated scripting. The sweep through tenants occurred in sorted order, with actions taken just seconds apart. This indicated a script working from a predefined target list. Operations within the tenants included directory operations, reconnaissance, and changes to app credentials, identities, and groups. Microsoft clarified that the activity did not result from a vulnerability in its own systems or products, but rather from the compromise of the third-party application.

The use of ARTEX marks a shift in how threat actors operate. The framework, which can utilize various AI models, has been linked to other breaches, including incidents at South Korean financial institutions. CrowdStrike noted that the suspect in those separate attacks was likely based in China and allegedly used ARTEX with a specific AI model. In response to the increased attention, the developer of ARTEX, who uses the handle Autumn-27, announced that the project would no longer be updated and would become closed source.

ConnectWise has acknowledged the unauthorized access and has taken precautionary steps. The company suspended its Cloud Backup, SaaS Security, and Cloud Management services to contain the issue. A phased restoration process has begun, with recovery expected to take several days. Currently, there are no indicators that partner backup data was compromised. Microsoft advises customers to keep affected app connections disabled until formal restoration instructions are issued. Users are also encouraged to review activity logs from this month to assess any potential exposure.

For ordinary people and business owners, the immediate takeaway is a need for patience and verification. The situation underscores the growing risk posed by automated AI agents in cyberattacks. As restoration efforts continue, organizations in the region should monitor their systems for unusual sign-in patterns and prepare for potential changes to their security configurations. The incident highlights the importance of monitoring third-party application credentials, as they can provide a direct path to privileged access.

Looking ahead, the focus will remain on the phased restoration of ConnectWise services. Security teams will likely continue to analyze logs to identify the full extent of the intrusion. The shift toward closed-source development for ARTEX may influence future threat intelligence sharing. For now, the priority is ensuring that affected tenants have secured their environments and that any unauthorized access has been fully revoked before normal operations resume.