Microsoft Defender for Office 365: New AI-Powered Threat Classification Feature

If you're managing email security for your organization, here's your fresh dose of sweet tech relief! Microsoft has announced a major update to its Defender for Office 365 suite—a new Threat Classification feature powered by AI and machine learning. Yep, the very tools that make self-driving cars a thing and let your smartphone predict what you’re about to text your friend. This update promises to up the ante in email security by smartly analyzing email threats and giving IT admins the tools they need to outwit malicious actors.
Let’s dig deeper into what this means for your inbox’s safety net and how this new feature operates behind the scenes.

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Why Threat Classification?​

Email is a long-time favorite highway for cybercriminals to deliver malware, phishing attacks, or other devious payloads. On average, phishing attacks account for the majority of cyber incidents, exposing sensitive company data or extorting victims into clicking questionable links. It’s a war zone, folks, and Defender for Office 365 is essentially your front-line defense system. The new Threat Classification feature aims to go beyond just flagging generic threats and actually help administrators understand their intent. In other words, it tries to answer the timeless security question: "Why on Earth did this threat get sent, and what exactly is it trying to do?"
For example:

• Is the attacker fishing for account credentials?
• Are they targeting corporate payment systems with fake invoice scams?
• Are they dangling the shiny lure of free gift cards to harvest personal details?

Instead of lumping all bad emails under the vague umbrella term of “threats,” this feature pulls out the magnifying glass and categorizes attacks, providing granularity that empowers security teams to respond more effectively.

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How It Works: The Technology Museum​

This Threat Classification engine is no ordinary watchdog—this one comes supercharged with Artificial Intelligence. Specifically, it leans on Large Language Models (LLMs) and Machine Learning (ML)—the same types of technologies underpinning modern conversational AI tools like ChatGPT.
Here’s what makes it unique:

• Large Language Models (LLMs): These models process the natural language in emails to understand the context at a deeper level. Whether it’s subtle wording in a phishing email or cleverly disguised links, the LLM can piece together narrative clues to identify malicious intent.
• Machine Learning (ML): By relying on continuous self-learning methods, the system dynamically improves as it encounters new patterns of attacks. Essentially, each bad email that gets processed sharpens the tool for the next attack.

Both elements combined create a robust AI-bot detective squad capable of trend analysis, granular categorization, and even predictive modeling to hypothesize what cyberattacks might come next.

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New Features to Explore in Defender for Office 365​

Microsoft's update introduces threat categorization into critical existing workflows and tools. Below is a preview of what’s new in your arsenal:

1. Expanded Threat Explorer Functionality​

The Threat Explorer tool now includes a Threat Classification filter, allowing you to search based on specific threat types such as:

• Invoice Scams
• Corporate Data Theft
• Payroll Fraud
• Lure-Based Attacks (the ol’ "Click now to win!" routine)
• Gift Card Fraud

With these added filters, admins can create tailored responses, better analyze the volume and types of incoming threats, and export classified data for deeper research.

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2. Advanced Hunting Enhancements​

If you’re an IT ninja working with complex rules to detect suspicious activity, this one’s for you. The “ThreatClassification” column in the EmailEvents table now allows for creating custom detection rules that are classification-aware. Think of this as supercharging your existing hunting queries with actionable intelligence that allows customization.

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3. Email Summary Panel​

Threat summaries for alerts, incidents, and submissions now include classification details:

• Breakdown by type: Quickly figure out how many phishing emails versus invoice scams you’re dealing with.
• Visualization: Trend charts let you see emerging patterns and spikes.
• Consolidated Analysis: Integrated into multiple modules, like Automatic Incident Response (AIR) and reports, providing a 360-degree view.

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4. Email Entity Pages​

For any specific email flagged as suspicious, the Email Entity details now feature the new classification field in the detection summary. This inclusion brings clarity around the precise threat type and what an attacker seemed to aim for. It’s one thing to see an alert about a "Phishing" email, but it’s quite another to confidently know it’s a targeted payroll fraud attempt.

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What It Means for IT Admins​

This isn’t just a shiny new coat of paint on Defender for Office 365; it’s a full-blown transformation. By separating the what (e.g., "This is phishing") from the why (e.g., "This phishing attack is looking for gift card fraud opportunities"), security teams gain critical context. Imagine being able to update detection rules and workflows to hit exact vulnerabilities—leaving malicious actors scrambling for new tactics.
Pro Tip: Microsoft encourages Defender for Office 365 admins to proactively update their custom rules to include these classification fields. This allows for more dynamic, automation-driven threat mitigation.

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The Bigger Picture: The Future of Email Security​

Microsoft's move toward introducing Threat Classification shows the increasing reliance on AI to address cybersecurity challenges. It’s no longer enough for systems to tell us, “Hey, that email looks sketchy.” Companies need contextual reasoning, faster response times, and advanced categorization to cover all their bases. Especially in "Zero Trust" environments, where every action and user must prove its legitimacy, granular threat analysis like this is a massive leap forward.
This update also mirrors industry-wide trends:

• The use of advanced behavioral AI to offer real-time insights.
• Emphasis on trend prediction to prevent future attacks based on historical data.
• Growing adoption of cross-functional tools like Advanced Hunting, which blend proactive and reactive analysis.

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Final Thoughts​

The new Threat Classification feature in Defender for Office 365 is like giving a detective a crystal-clear magnifying glass instead of a blurry lens. By breaking email threats into actionable categories and providing greater insights into intent, Microsoft is handing IT administrators a sophisticated weapon in the fight against cybercrime. If your email security setup already leans on Defender, you’re in for a much-needed turbo boost.
With the update rolling out soon, the message is clear: upgrade your workflows, revisit old automated rules, and get familiar with these shiny new fields and filters. After all, the cybercriminals aren’t slacking off—so why should your defenses?
What are your thoughts on Microsoft's latest implementation? Is this update a game-changer for your organization's cybersecurity needs? Join the conversation in the WindowsForum.com community! We’d love to hear how you'll use these advanced tools to keep inboxes safe and secure.

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Source: Petri IT Knowledgebase Microsoft Defender for Office 365 Adds Threat Classification Feature