Microsoft has attributed the recent ConnectWise Cloud Backup supply-chain compromise to the China state-aligned actor Storm-0940. The activity became more serious on October 15, 2026, when AI agents obtained access to identities belonging to multiple ConnectWise cloud applications and used those credentials to authenticate into customer environments. That trusted application access gave the attackers a route into downstream tenants without requiring interactive user sign-in.

The operation used ARTEX, a Go-based agentic AI penetration-testing framework. Microsoft said the framework accelerated scanning and reconnaissance, password spraying and OAuth application abuse. The activity was conducted at machine speed against hundreds of organizations in sectors including aerospace, energy, financial services, government, manufacturing, software and technology.

The speed was visible before the ConnectWise access was used. Between October 10 and 14, infrastructure associated with Storm-0940 targeted 327 accounts across eight organizations in an automated password-spray campaign against Microsoft 365 and Exchange Online. Microsoft recorded more than 151,000 failed logon events, with activity peaking at 2,900 failures per minute on October 11. No successful authentication or directory change was detected during that period, but the volume left defenders only a short time to respond.

After the attackers acquired the ConnectWise application identities, the campaign shifted from unsuccessful password spraying to abuse of established application trust. In some targeted environments, the activity progressed to Microsoft Graph and directory operations. Observed actions included reconnaissance, application credential changes and modifications involving identities, groups and privileged roles.

That distinction matters for incident response. Removing the original compromised application may not remove every foothold if the attackers changed credentials or created access through other identities and cloud services. Organizations should therefore examine application credentials, OAuth applications, privileged roles and related directory changes when investigating suspicious use of trusted cloud integrations.

The campaign also widens the supply-chain risk beyond ConnectWise itself. ConnectWise said MSPs are both targets and routes into the organizations they serve, while services were temporarily shut down and restored in phases over several days. For businesses that depend on an MSP or a connected cloud application, the relevant question is not only whether a user account was compromised, but also which application identities and delegated permissions were trusted by the tenant.

Microsoft said Storm-0940 is not the only group using ARTEX and that threat actors in multiple regions have weaponized the framework. The immediate lesson is operational rather than speculative: automated agents can compress reconnaissance, credential attacks and privilege changes into a much shorter detection window, making application-level monitoring and rapid review of cloud identity changes central to containing similar incidents.

Sources

• China-Linked Hackers Use ARTEX AI Agents in ConnectWise Supply Chain Attack