Tal_Guetta explores how Microsoft Defender for Identity leverages AI-driven intelligence to detect and mitigate exposed credentials in Active Directory, offering proactive security posture management for organizations.

How Microsoft Defender Uses AI to Detect Exposed Credentials in Identity Systems

Microsoft Defender for Identity introduces a new AI-powered posture alert designed to detect exposed credentials stored in free text fields like those in Active Directory (AD) and Microsoft Entra ID. This innovation addresses a long-standing security risk where sensitive data, such as service account credentials, are inadvertently stored in unregulated directory fields, making them easy targets for attackers.

Understanding Free Text Fields in Identity Systems

Free text fields in AD and Entra ID allow administrators to store unstructured or semi-structured data, aiding in integrations with HR systems, email tools, or Privileged Access Management (PAM) solutions. However, their ungoverned nature can lead to improper storage of credentials or personal identifiers, inadvertently increasing the organization’s attack surface.

Non-Human Identities (NHI)

Non-human identities, such as service accounts and automation users, are particularly at risk. These accounts often bypass traditional controls like multi-factor authentication due to automation requirements, leading administrators to improperly store credentials in unprotected fields for expediency. As a result, these accounts become especially attractive targets—often holding elevated privileges yet receiving less scrutiny in standard security workflows.

Recent research highlighted the scale of the problem, with over 40,000 exposed credentials identified across 2,500 tenants. Attackers and red teams increasingly target these fields, leveraging AI-assisted enumeration tools to move from exposure to exploitation within seconds.

AI-Driven Posture Alert: Layered Intelligence

Microsoft Defender’s new posture alert applies a two-layered detection model:

  • Initial Scan: The system scans directory data for potential credential exposures, such as base64-encoded secrets or password-like strings in free text fields.
  • Contextual AI Analysis: An advanced AI model evaluates the flagged data, considering context, language, and usage patterns—such as association with automation, recent changes, and script references. This reduces false positives and produces actionable, high-confidence alerts.

By harnessing AI, Microsoft enables defenders to operate with speed and accuracy on par with modern adversaries—helping organizations resolve misconfigurations before exploitation occurs.

Getting Started

  • The posture recommendation is available in public preview to all Defender for Identity customers.
  • To learn more, review the official Microsoft documentation.
  • Security teams can investigate exposures in the Defender portal’s “Exposure Management” section and take remedial action.

Key Takeaways

  • Insecure credential storage in identity directory free text fields opens significant risk.
  • Microsoft Defender for Identity now offers layered AI-powered posture alerts to identify and mitigate these exposures.
  • Defenders gain actionable, high-confidence insights to proactively secure hybrid and cloud identity environments.

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