Attackers Use Passkey Phishing to Hijack Microsoft Cloud Accounts and Exfiltrate Data

Attackers are exploiting user trust through two sophisticated social engineering campaigns: AI-generated CEO impersonation emails targeting finance teams for fraudulent wire transfers, and passkey-themed phishing luring users into compromising their Microsoft cloud credentials. The root issue is that employees lack the awareness to distinguish legitimate authentication requests from convincing fakes, even when modern passkey technology is referenced to appear credible. Once cloud accounts are compromised, attackers move quickly to exfiltrate sensitive data before detection. This matters because AI-enhanced phishing dramatically lowers the skill barrier for attackers while raising the believability of attacks, making human judgment alone an insufficient defense.