AI Won't Break Microsoft 365. Your Security Backlog Will

Here's what keeps me up at night. Not zero-days. Not sophisticated nation-state attacks. What worries me is the backlog.

Every MSP has one. The list of security configurations that need fixing. The policies have been sitting in "report only" mode since last year. The E5 features that clients are paying for but nobody's turned on because it might break something. The app registrations with excessive permissions from three years ago that nobody's audited. The conditional access policies that need updating but keep getting pushed to next quarter.

We all know this backlog exists. We tell ourselves we'll get to it. But quarters turn into years, and that backlog just grows. Meanwhile, AI attackers don't have a backlog. They have automation.

Most breaches in Microsoft 365 won't start with a zero-day. They'll start with a setting that's been in "report only" for two years.

Example tenant: critical Conditional Access policies exist but are left in report mode rather than enforced

The Scale Problem Nobody Wants to Talk About

Microsoft 365 runs on millions of tenants. Most of them look almost identical. Standard configurations, common patterns, similar mistakes. For an attacker, this is perfect. Learn how to exploit one misconfigured tenant and you've learned how to exploit thousands.

For MSPs managing hundreds of clients, this scale creates an impossible situation. You're responsible for keeping dozens or hundreds of M365 environments secure, each with their own quirks and business requirements. You know what needs fixing. You've probably documented it. But there's never enough time, never enough budget, and nobody wants to be the person who breaks email for the sales team. And when the same misconfiguration pattern exists across dozens of tenants, automated AI attackers don't find just one weakness – they find it everywhere, all at once.

So, things stay misconfigured. Legacy authentication stays enabled "just for that one app." Safe Attachments is configured less aggressively to minimize user disruption and operational friction. Identity risk policies stay in report mode because nobody wants to accidentally block the CEO. Each compromise decision makes sense in isolation. Together, they create an attack surface that AI can exploit at scale.

AI Changed the Economics of Attacks

Traditional attackers had to make choices. They couldn't target everyone simultaneously. They had to pick targets, do reconnaissance manually, craft attacks individually. This created natural bottlenecks that gave defenders some breathing room.

AI removed those bottlenecks. Once attackers gain initial access, a single AI agent can enumerate permissions across hundreds of tenants simultaneously. It can identify common misconfigurations at machine speed. It can craft targeted phishing emails that are contextually perfect because it scrapes LinkedIn and corporate websites in seconds.

In October 2025, Microsoft blocked more than 13 million phishing emails from a single platform. These weren't generic campaigns. They were tailored, context-aware messages generated at scale.

At the same time, the breach timeline collapsed. What used to take weeks now happens in hours, often while your team is asleep.

What AI Actually Exploits

Working with MSPs across hundreds of Microsoft 365 environments, here's what we see when onboarding new tenants. They almost always have Microsoft 365 E5. Premium security capabilities. They should be well protected.

But here's the reality. Identity risk detection exists but isn't enforced. MFA is deployed and everyone thinks the job is done. Conditional access policies were set up two years ago and nobody's updated them since. Safe Links runs in audit mode because it was causing friction. App registrations proliferate with nobody reviewing what permissions were granted.

Example application registration with high-privilege Microsoft Graph permissions and no designated owner, a common source of persistent access risk.

This gap between what's licensed and what's actually protecting them is exactly what AI exploits. It doesn't need zero-day vulnerabilities. Why bother when organizations are running with legacy authentication enabled, dormant service principals with excessive permissions, and security policies that haven't been updated since deployment?

Why Misconfigurations Are Different from Vulnerabilities

When researchers find a zero-day, it makes headlines. Microsoft releases a patch. Security teams deploy updates. Problem solved.

Misconfigurations don't work that way. Nobody's releasing a patch to fix your conditional access policies. Microsoft can't automatically audit your app registrations. There's no update that enforces your identity risk policies or removes that service principal with Mail.ReadWrite that someone created in 2022 and forgot about.

These aren't problems Microsoft can fix for you. They're operational gaps that require time, expertise, and ongoing maintenance. And that's exactly why they persist.

In June 2025, researchers at Aim Security demonstrated how they could make Copilot exfiltrate sensitive data by sending an email with hidden instructions. Microsoft patched that specific vulnerability within weeks. But the broader problem remains. Organizations are deploying AI agents with broad permissions across environments full of misconfigurations. Even with that bug fixed, the combination of AI capabilities and poor configuration hygiene creates ongoing risk that no patch addresses.

You can read about their research here: https://www.aim.security/lp/aim-labs-echoleak-m365.

The real threat isn't undiscovered vulnerabilities that researchers will eventually find and vendors will patch. It's the known configuration problems sitting in your backlog right now that AI can exploit today.

What 2026 Actually Looks Like

Organizations are deploying AI rapidly. Copilot everywhere. LLM-powered assistants embedded across the business. Custom AI agents built by business users without IT involvement. These agents need broad permissions to function. Access to email, files, SharePoint, Teams.

Nobody's thinking about what happens when these agents interact with misconfigured environments. That conditional access policy that doesn't check token binding? Bypassed. Those app registrations with excessive permissions? Weaponized immediately.

The backlog problem compounds. New features ship constantly in M365. New settings to configure. New policies to implement. Security debt grows faster than teams can pay it down.

And AI attackers are hunting for these configuration gaps at scale right now. They're not waiting for you to get around to fixing things. They're exploiting them across thousands of tenants simultaneously, faster than human defenders can respond.

Stop Waiting for Next Quarter

The risk in 2026 isn't that attackers will discover something new. It's that AI will find everything we already know is wrong, faster than we can fix it. Microsoft 365 isn't insecure because the tools aren't there. It's insecure because the backlog keeps growing.

You don't need new tools. You need to use what you already have. Enable identity risk policies. Actually block legacy authentication everywhere. No exceptions. Audit app registrations and revoke the ones nobody's using. Turn on the E5 features your clients are already paying for.

These aren't exotic security measures. They're fundamentals that most organizations have licensed but never implemented. And they're exactly what AI attackers are counting on you to keep ignoring.

I've spent years watching MSPs struggle with this. The pressure is real. The time constraints are real. The fear of breaking something is real. But so is the threat. And in 2026, with AI attackers operating at scale and speed we've never seen before, the cost of waiting has become too high.

The gap between what you're paying for and what's actually protecting you is where breaches happen. Not because AI invented some unstoppable attack. Because AI is exceptionally good at exploiting configuration problems that have been sitting in your backlog.

Here's what I know: every day you wait, that backlog grows. Every day you wait, AI attackers get faster. Every day you wait, the odds shift further against you.

Microsoft gives you the tools. They keep improving the platform. But they can't configure your tenants for you. That's on us.

AI won't break M365. But if we keep treating configuration debt as something we'll get to "next quarter," attackers won't have to.

The tools exist. The problems are known. In 2026, the biggest risk isn't what attackers will discover, it's what they'll automate before you fix it.

Because "we'll get to it" isn't a strategy anymore.

It's a vulnerability.

About the Author: Shimon Magal is Co-Founder and CTO of Optimize365, where he leads the development of a platform that helps MSPs and MSSPs continuously assess, manage, and reduce Microsoft 365 configuration risk. A Microsoft 365 security specialist, he focuses on helping service providers improve security posture and operational visibility at scale.