Microsoft says a China-aligned hacking group used AI agents to attack more than 2,250 Microsoft 365 business accounts after breaking into a backup service that IT providers use to protect their clients’ data. The group, which Microsoft tracks as Storm-0940, got in through ConnectWise Cloud Backup, formerly known as SkyKick. Microsoft published its findings on October 21, 2026, and said the AI agents scanned, guessed passwords and abused permissions with limited human involvement.
How did the attackers get in?
Through a trusted middleman. ConnectWise Cloud Backup lets IT service providers back up their customers’ Microsoft 365 email and files. To do that, it holds powerful "application identities", think of them as master keys that can open many customers’ accounts at once. Storm-0940 compromised several of these keys. In some cases it added new authentication keys and changed administrator roles so it could keep its access even if a password was reset.
That is what makes supply-chain attacks so dangerous: the victims never did anything wrong. Their IT provider used a reputable backup tool, and the backup tool became the way in.
How big was the attack?
Large and fast. Microsoft says Storm-0940 tried to sign in to more than 2,250 Microsoft 365 tenants, at up to 2,900 attempts a minute, and in some cases gained high-level cloud access within three hours. Most attempts failed. Security firm Huntress, which raised the alarm first, confirmed breaches at 162 tenants by October 16 and later found nearly 1,000 tenants hit by sign-in attempts, more than 300 of which showed successful logins.
What role did AI play?
The group used ARTEX, a free, open-source hacking tool built around AI agents that can run on different AI models. In plain terms, instead of a person typing every command, the AI agent worked through the steps itself: mapping networks, trying passwords and testing what each stolen key could unlock. Microsoft did not say which AI model powered it. ARTEX is the same tool linked to attacks on Korean banks and targets in 19 countries, and its developer pulled it from GitHub on October 8 citing misuse, too late to stop copies already in circulation.
Was customer data stolen?
Not confirmed. ConnectWise says there is "no indication" backup data was compromised. It disabled seven application identities on October 17, took Cloud Backup offline, and began a staged restoration on October 21 that it expects to take several days. ConnectWise has not publicly responded to Microsoft naming Storm-0940. Microsoft says the incident did not come from a flaw in its own systems.
What should businesses do?
- Keep ConnectWise integrations disabled until ConnectWise confirms they are safe to restore, per Microsoft’s advice.
- Review Microsoft 365 sign-in logs going back to at least October 15, 2026, looking for logins from apps or places you do not recognise.
- Audit app permissions: check which third-party apps hold broad access to your tenant, and remove any you no longer use.
- Ask your IT provider directly whether they used ConnectWise Cloud Backup or SkyKick.
It is the same lesson as AgentCorruption: one over-powerful key in a shared service can open everything behind it. See our Black October roundup for the full month.
Read The Next Web’s report on Microsoft’s findings.
