Ethical Hacking News
A China state-aligned actor, dubbed Storm-0940, has been linked to a supply chain compromise of the ConnectWise Cloud Backup application. The attack used ARTEX, a Go-based agentic AI penetration testing framework, to speed up scanning and reconnaissance, password spraying, and OAuth application abuse. The incident highlights the growing threat of AI-powered attacks on software supply chains, and the need for defenders to be vigilant in protecting their cloud infrastructure.
Microsoft revealed a supply chain compromise of the ConnectWise Cloud Backup application attributed to a China state-aligned actor, dubbed Storm-0940. Storm-0940 used ARTEX, a Go-based agentic AI penetration testing framework, to speed up scanning and reconnaissance, and bypass traditional security controls. The threat actor targeted hundreds of organizations across the world, including aerospace and defense, automotive, and financial services. Storm-0940 established persistence by adding credentials to existing OAuth applications within cloud infrastructures to gain access to Microsoft 365 resources. The incident highlights the growing threat of AI-powered attacks on software supply chains and the need for defenders to be vigilant in protecting their cloud infrastructure. ConnectWise has been restoring services in phases, emphasizing the need for defenders to be vigilant in protecting their cloud infrastructure from AI-powered attacks.
The world of cybersecurity is becoming increasingly complex, with threat actors continually evolving their tactics, techniques, and procedures (TTPs) to stay one step ahead of defenders. Recently, Microsoft revealed that a China state-aligned actor, dubbed Storm-0940, was behind a supply chain compromise of the ConnectWise Cloud Backup application. This incident highlights the growing threat of AI-powered attacks on software supply chains, and the need for defenders to be vigilant in protecting their cloud infrastructure.
According to Microsoft, Storm-0940 used ARTEX, a Go-based agentic AI penetration testing framework, to speed up scanning and reconnaissance, password spraying, and OAuth application abuse at downstream victims. ARTEX was made closed-source in the wake of its abuse against South Korean financial institutions, and its use in the ConnectWise incident is a stark reminder of the dangers of unregulated AI-powered attacks.
The threat actor used the AI tool at "machine speed" to automate attacks targeting hundreds of organizations across the world, spanning a broad range of sectors. Targets included aerospace and defense, automotive, chemicals, energy, financial services, government, legal, manufacturing, media, military, semiconductor, software, technology, and think tanks and non-profits. The use of ARTEX to accelerate the speed of compromised application abuse allowed Storm-0940 to operate without requiring an interactive user sign-in, effectively bypassing traditional security controls.
Microsoft noted that Storm-0940 was first detailed by the company in November 2024, revealing that the threat actor has been leveraging a botnet called Quad7 (aka CovertNetwork-1658) to conduct highly evasive password spray attacks. The threat actor is assessed to be active since at least 2021, and has been observed exploiting internet-facing applications to gain initial access, followed by using compromised accounts to move through targeted environments.
In addition, Storm-0940 has been observed establishing persistence by adding credentials to existing OAuth applications within cloud infrastructures to ensure access to Microsoft 365 resources. According to Microsoft, a chunk of these ARTEX-driven attacks have resulted in the adversary gaining privileged access to an organization's cloud infrastructure, including several instances where the time frame from initial targeting to privileged access was less than 3 hours.
In the case of the ConnectWise incident, Storm-0940 has been observed using ARTEX to attempt to sign in to more than 2,250 tenants at 2,900 sign-in attempts per minute, a pace that gives defenders a short window to detect and respond. During this window, Microsoft captured over 151,000 failed logon events. The activity peaked on October 11 at 2,900 failures per minute, resulting in more than 111,000 failures in a single day. Of these, 48 accounts received more than 1,000 failures. No successful authentication, token issuance, Graph call, or directory change was detected, it noted.
That changed on October 15, 2026, when the AI agents gained access to the identities of multiple ConnectWise cloud applications and began to use them to authenticate to customer environments. The AI agents operating on behalf of the threat actor continued to use the same IP range to authenticate to customer environments using the illicit access acquired through these stolen app credentials, effectively taking advantage of the already established trust by these apps within a tenant.
In some of these cases, the AI agents are assessed to have progressed beyond authentication to Microsoft Graph and directory operations. This included reconnaissance, application credential modifications to establish persistence, and changes involving identities, groups, and privileged roles. The application credential modification made by Storm-0940’s associated agents in the targeted victims' environments can lead to persistence through other identities, credentials, and cloud services.
The findings once again highlight how threat actors are increasingly integrating agentic AI tools into their offensive security workflows to quickly carry out attacks at scale. Agents are not constrained by factors affecting humans – they can work around the clock, on weekends, and on holidays, and attempt multiple breach paths simultaneously, enabling significantly reduced time from selecting a target to achieving objectives, increasing the speed and impact of complex attacks like supply chain compromises.
In response to the findings, ConnectWise said the activity "describes a campaign that reaches well beyond any one company," adding "nation-state actors are increasingly targeting the software supply chain, because one trusted connection can open the door to many organizations." "AI now lets them test those connections at [...] 'machine speed.' MSPs are in the middle of that chain. They are targets in their own right, and they are also a path into every client they serve. Every vendor and every MSP must defend itself with both of those risks in mind."
ConnectWise, which temporarily shut down services following the attacks, has been restoring services in phases, a process that it said will take several days. The incident serves as a stark reminder of the need for defenders to be vigilant in protecting their cloud infrastructure from AI-powered attacks.
Related Information:
https://www.ethicalhackingnews.com/articles/AI-Powered-Supply-Chain-Attack-How-ARTEX-and-Storm-0940-Compromised-ConnectWise-Cloud-Backup-Application-ehn.shtml
https://thehackernews.com/2026/10/china-linked-hackers-use-artex-ai.html
Published: Thu Oct 22 01:04:32 2026 by llama3.2 3B Q4_K_M
