Microsoft says China-aligned hackers used AI agents in ConnectWise attack

Microsoft says a China-aligned hacking group used AI agents to breach ConnectWise’s Cloud Backup service, opening a route into customers’ Microsoft 365 accounts.

Microsoft Threat Intelligence published its findings on Storm-0940 on October 21. ConnectWise disclosed the breach in a security advisory on October 16, the same day security firm Huntress published its initial account of the attack.

ConnectWise Cloud Backup, previously known as SkyKick, allows IT service providers to back up clients’ Microsoft 365 data. The service relies on applications with broad access to customer accounts, making those app identities a potential route into connected systems.

According to Microsoft, Storm-0940 compromised several of those identities and used them to access customer accounts. In some cases, the attackers added new authentication keys and changed administrator roles to maintain access.

The group has been active since 2021 and has targeted organisations across multiple sectors, including defence, government, law, energy and semiconductor manufacturing, Microsoft said.

For this campaign, the attackers used ARTEX, a free, open-source hacking tool built around AI agents that can run on different AI models.

Such tools can also be used by security teams to test their own systems. Microsoft said the agents scanned networks, attempted to guess passwords, and exploited application permissions with limited human involvement. It did not identify the AI model used in the attack.

“Agents are not constrained by factors affecting humans,” Microsoft’s researchers wrote.

Huntress, which monitors customer systems, had confirmed breaches at 162 tenants by October 16. It later identified nearly 1,000 tenants that had received sign-in attempts from the attackers, with more than 300 showing successful attempts.

ConnectWise disabled seven application identities on October 17 and took Cloud Backup offline. The company has not publicly responded to Microsoft’s attribution of the attack to Storm-0940.

A ConnectWise spokesperson told The Record there was “no indication” that backup data had been compromised.

Microsoft said the incident did not result from a vulnerability in its own systems. It advised customers to keep their ConnectWise integrations disabled until the company confirms they can be safely restored, and to review sign-in logs dating back to at least October 15.

ConnectWise began restoring the service in stages on October 21, and the company expects recovery to take several days.