China-Linked Hackers Storm-0940 Deploy ARTEX AI in ConnectWise Supply Chain Attack

Storm-0940 Deploys ARTEX AI in ConnectWise Supply Chain Attack

Microsoft disclosed on Wednesday that Chinese state-aligned hacking group Storm-0940 orchestrated a sophisticated ConnectWise cyberattack using ARTEX AI, a Go-based agentic AI penetration testing framework.1

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The China-linked hackers compromised ConnectWise Cloud Backup application in a supply chain attack that targeted hundreds of organizations worldwide since September 2026.2

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ConnectWise acknowledged on October 16 that it was investigating recent attempts of unauthorized access associated with the ConnectWise Cloud Backup environment.3

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AI-Driven Penetration Testing Tool Operates at Machine Speed

The Chinese state-aligned hacking group leveraged ARTEX, an AI-driven penetration testing tool, to automate attacks at machine speed across multiple sectors including aerospace, defense, automotive, chemicals, energy, financial services, government, legal, manufacturing, media, military, semiconductor, software, technology, think tanks and nonprofits.1

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Microsoft reported that Storm-0940 used the agentic AI penetration testing framework to accelerate scanning and reconnaissance, password spraying, and OAuth application abuse at downstream victims.1

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ARTEX allows users to use any AI model to automate penetration testing tasks and can be configured to run autonomous tasks including reconnaissance and data exfiltration.2

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Record-Breaking Attack Speed: 2,900 Sign-In Attempts Per Minute

Between October 10 and 14, 2026, Storm-0940 infrastructure conducted an automated cross-tenant password spray campaign targeting 327 accounts across eight organizations to gain access to Microsoft 365 and Exchange Online.1

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The attack attempted to sign in to more than 2,250 tenants at 2,900 sign-in attempts per minute, giving defenders a short window to detect and respond.1

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Microsoft captured over 151,000 failed logon events during this window, with activity peaking on October 11 at 2,900 failures per minute, resulting in more than 111,000 failures in a single day.1

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Privileged Cloud Persistence Achieved in Under 3 Hours

Microsoft revealed that several ARTEX-driven attacks resulted in Storm-0940 gaining privileged access to organizations' cloud infrastructure, with time frames from initial targeting to privileged access of less than 3 hours in multiple instances.1

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While the majority of targeting was not successful, Storm-0940 achieved privileged cloud persistence at many organizations in a brief time.4

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On October 15, 2026, the AI agents gained access to identities of multiple ConnectWise cloud applications and began authenticating to customer environments, effectively taking advantage of already established trust by these apps within a tenant.1

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AI Agents Conduct Reconnaissance and Establish Persistence

After acquiring control of ConnectWise cloud application identities, AI agents progressed beyond authentication to Microsoft Graph and directory operations.1

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Activities included reconnaissance, application credential modifications to establish persistence, and changes involving identities, groups, and privileged roles.1

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Microsoft warned that application credential modifications made by Storm-0940's associated agents can lead to persistence through other identities, credentials, and cloud services, remaining active as a backdoor even after the original compromised application is mediated.1

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Storm-0940's History and Evolving Tactics

Storm-0940 was first detailed by Microsoft in November 2024, with the threat actor assessed to be active since at least 2021.1

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The adversary previously leveraged a botnet called Quad7 to conduct highly evasive password spray attacks and has been observed exploiting internet-facing applications to gain initial access.1

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Microsoft noted that Storm-0940 is far from the only hacking crew to rely on ARTEX, observing threat actors across multiple geographic regions weaponizing the framework in their operations.1

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Microsoft Recommends Immediate Mitigation Measures

Microsoft recommends that organizations disable affected ConnectWise connections until the issue is fixed and preserve configuration before deleting enterprise apps to track any changes.4

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Organizations should review Microsoft 365 tenant where affected applications were authorized and examine Microsoft 365 and Entra audit logs for unauthorized configuration changes.4

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The findings highlight how threat actors increasingly integrate agentic AI tools into offensive security workflows to quickly carry out attacks at scale, with agents working around the clock without human constraints.1

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