China-aligned group used ARTEX AI agents on Microsoft 365 tenants after ConnectWise compromise
What happened
Microsoft attributes the compromise of ConnectWise Cloud Backup to a China state-aligned group it calls Storm-0940, which used the open-source ARTEX framework to automate attacks on customer Microsoft 365 tenants. Reuters reports that hundreds of organizations were targeted and most attempts failed, but the group gained lasting privileged cloud access at many in a short time.
BleepingComputer reported that the attacker signed in as the Cloud Backup application using its secret, through an automated script with no user login, so multi-factor authentication did not apply. How the vendor credentials were obtained is unclear. Huntress counted at least 162 compromised tenants among those it monitors. ConnectWise announced the service interruption early on 17 October UTC and cut customer access.
Reuters, citing Microsoft, says ARTEX can run any AI model to automate testing tasks, including autonomous reconnaissance and data exfiltration. Targeted sectors included aerospace, defense, energy, financial services, government and software. Reuters gives no exact count of affected tenants.
How it happened
Supply chain and access: Stolen token or key. Stolen or leaked access tokens, API keys or passwords were used to get in.
The software involved works with many AI models, so no single model maker was involved. The product was ARTEX, which is open source, a type of AI agent.
Impact
Data was exposed. Data involved: credentials. Many organizations were affected.
Severity is rated High, calculated from how far the incident reached and how sensitive the data was.
Was the AI at fault?
No. The failure was in the systems, settings or people around the AI, not in the model's behaviour.
Status and timeline
Confirmed by the affected organization, the AI vendor, a regulator or a named security research firm.
It became public on 21 Oct 2026.
ConnectWise cut off the affected application connections and is restoring services in phases. It warned that this does not remove access already established in individual customer tenants, which needs separate review. On 18 October BleepingComputer reported that Cloud Backup remained unavailable, with SaaS Security and Cloud Management also offline as a precaution. ConnectWise's CEO said a China state-aligned group appeared to be responsible; a Chinese embassy spokesperson rejected the allegations.