Inside an AI‑enabled device code phishing campaign

Summary

Microsoft Security has identified a widespread phishing campaign leveraging Device Code Authentication flow with AI-powered personalization, dynamic code generation, and backend automation to compromise organizational accounts at scale. The campaign uses generative AI for hyper-personalized lures, automation platforms to bypass detection, and compromised redirect chains through legitimate cloud services (Vercel, Cloudflare Workers, AWS Lambda). Threat actors focus post-compromise activity on high-value targets for email exfiltration and persistence via malicious inbox rules.

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Share Link copied to clipboard! Tags Phishing Content types Research Products and services Microsoft DefenderMicrosoft Security Experts Topics Actionable threat insightsDefending against advanced tactics Microsoft Defender Security Research has observed a widespread phishing campaign leveraging the Device Code Authentication flow to compromise organizational accounts at scale. While traditional device code attacks are typically narrow in scope, this campaign demonstrated a higher success rate, driven by automation and dynamic code generation that circumvented the standard 15-minute expiration window for device codes. This activity aligns with the emergence of EvilToken, a Phishing-as-a-Service (PhaaS) toolkit identified as a key driver of large-scale device code abuse. This campaign is distinct because it moves away from static, manual scripts toward an AI-driven infrastructure and multiple automations end-to-end. This activity marks a significant escalation in threat actor sophistication since the Storm-2372 device code phishing campaign observed in February 2025. Advanced Backend Automation: Threat actors used automation platforms like Railway.com to spin up thousands of unique, short-lived polling nodes. This approach allowed them to deploy complex backend logic (Node.js), which bypassed traditional signature-based or pattern-based detection. This infrastructure was leveraged in the attack end-to-end from generating dynamic device codes to post compromise activities. Hyper-personalized lures: Generative AI was used to create targeted phishing emails aligned to the victim’s role, including themes such as RFPs, invoices, and manufacturing workflows, increasing the likelihood of user interaction. Dynamic Code Generation: To bypass the 15-minute expiration window for device codes, threat actors triggered code generation at the moment the user interacted with the phishing link, ensuring the authentication flow remained valid. Reconnaissance and Persistence: Although many accounts were compromised, follow-on activity focused on a subset of high-value targets. Threat actors used automated enrichment techniques, including analysis of public profiles and corporate directories, to identify individuals in financial or executive roles. This enabled rapid reconnaissance, mapping of permissions, and creation of malicious inbox rules for persistence and data exfiltration. Once authentication tokens were obtained, threat actors focused on post-compromise activity designed to maintain access and extract data. Stolen tokens were used for email exfiltration and persistence, often through the creation of malicious inbox rules that redirected or concealed communications. In parallel, threat actors conducted Microsoft Graph reconnaissance to map organizational structure and permissions, enabling continued access and potential lateral movement while tokens remained valid. Attack chain overview Device Code Authentication is a legitimate OAuth flow designed for devices with limited interfaces, such as smart TVs or printers, that cannot support a standard interactive login. In this model, a user is presented with a short code on the device they are trying to sign in from and is instructed to enter that code into a browser on a separate device to complete authentication. While this flow is useful for these scenarios, it introduces a security tradeoff. Because authentication is completed on a separate device, the session initiating the request is not strongly bound to the user’s original context. Threat actors have abused this characteristic as a way to bypass more traditional MFA protections by decoupling authentication from the originating session. Device code phishing occurs when threat actors insert themselves into this process. Instead of a legitimate device requesting access, the threat actor initiates the flow and provides the user with a code through a phishing lure. When the user enters the code, they unknowingly authorize the threat actor’s session, granting access to the account without exposing credentials. Phase 1: Reconnaissance and target validation The threat actor begins by verifying account validity using the GetCredentialType endpoint. By querying this specific Microsoft URL, the threat actor confirms whether a targeted email address exists and is active within the tenant. This reconnaissance phase is a critical precursor, typically occurring 10 to 15 days before the actual phishing attempt is launched. The campaign uses a multi-stage delivery pipeline designed to bypass traditional email gateways and endpoint security. The attack begins when a user interacts with a malicious attachment or a direct URL embedded within a high-pressure lure (e.g., “Action Required: Password Expiration”). To evade automated URL scanners and sandboxes, the threat actors do not link directly to the final phishing site. Instead, they use a series of redirects through compromised legitimate domains and high-reputation “Serverless” platforms. We observed heavy reliance on Vercel (*.vercel.app), Cloudflare Workers (*.workers.dev), and AWS Lambda to host the redirect logic. By using these domains, the phishing traffic “blends in” with legitimate enterprise cloud traffic, preventing simple domain-blocklist triggers. Once the targeted user is redirected to the final landing page, the user is presented with the credential theft interface. This is hosted as browser-in-the-browser (an exploitation technique commonly leveraged by the threat actor that simulates a legitimate browser window within a web page that loads the content threat actor has created) or displayed directly within the web-hosted “preview” of the document with a blurred view, “Verify identity” button that redirects the user to “Microsoft.com/devicelogin” and device code displayed. Below is an example of the final landing page, where the redirect to DeviceLogin is rendered as browser-in-the-browser. The campaign utilized diverse themes, including document access, electronic signing, and voicemail notifications. In specific instances, the threat actor prompted users for their email addresses to facilitate the generation of a malicious device code. Unlike traditional phishing that asks for a password, this “Front-End” is designed to facilitate a handoff. The page is pre-loaded with hidden automation. The moment the “Continue to Microsoft” button is clicked, the authentication begins, preparing the victim for the “Device Code” prompt that follows in the next stage of the attack. The threat actor used a combination of domain shadowing and brand-impersonating subdomains to bypass reputation filters. Several domains were designed to impersonate technical or administrative services (e.g., graph-microsoft[.]com, portal-azure[.]com, office365-login[.]com). Also, multiple randomized subdomains were observed (e.g., a7b2-c9d4.office-verify[.]net). This is a common tactic to ensure that if one URL is flagged, the entire domain isn’t necessarily blocked immediately. Below is a distribution of Domain hosting infrastructure abused by the threat actor: Phase 2: Initial access The threat actor distributes deceptive emails to the intended victims, utilizing a wide array of themes like invoices, RFPs, or shared files. These emails contain varied payloads, including direct URLs, PDF attachments, or HTML files. The goal is to entice the user into interacting with a link that will eventually lead them to a legitimate-looking but threat actor-controlled interface. Phase 3: Dynamic device code generation When a user clicks the malicious link, they are directed to a web page running a background automation script. This script interacts with the Microsoft identity provider in real-time to generate a live Device Code. This code is then displayed on the user’s screen along with a button that redirects them to the official microsoft.com/devicelogin portal. The 15-Minute race: Static vs. dynamic A pivotal element of this campaign’s success is Dynamic

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