Details on how it works and the severity of the bug can be read at Chromium. The vulnerability works on a default install, is exploitable via the Internet and is wormable.
The exploit provides system privilege level access and is surprisingly easy to perform as it does not require user action. The Google researchers say users can get infected by visiting a website, by receiving files via instant messaging or simply by receiving an e-mail. Reading the infected e-mail or opening attachments is not necessary because the Malware Protection service automatically inspects all system file system activity.
MsMpEng is the Malware Protection service that is enabled by default on Windows 8, 8.1, 10, Windows Server 2012, and so on. Additionally, Microsoft Security Essentials, System Centre Endpoint Protection and various other Microsoft security products share the same core engine. MsMpEng runs as NT AUTHORITYSYSTEM without sandboxing, and is remotely accessible without authentication via various Windows services, including Exchange, IIS, and so on.
On workstations, attackers can access mpengine by sending emails to users (reading the email or opening attachments is not necessary), visiting links in a web browser, instant messaging and so on. This level of accessibility is possible because MsMpEng uses a filesystem minifilter to intercept and inspect all system filesystem activity, so writing controlled contents to anywhere on disk (e.g. caches, temporary internet files, downloads (even unconfirmed downloads), attachments, etc) is enough to access functionality in mpengine. MIME types and file extensions are not relevant to this vulnerability, as MsMpEng uses it's own content identification system.
Vulnerabilities in MsMpEng are among the most severe possible in Windows, due to the privilege, accessibility, and ubiquity of the service.
The core component of MsMpEng responsible for scanning and analysis is called mpengine. Mpengine is a vast and complex attack surface, comprising of handlers for dozens of esoteric archive formats, executable packers and cryptors, full system emulators and interpreters for various architectures and languages, and so on. All of this code is accessible to remote attackers.
I think @natashenka and I just discovered the worst Windows remote code exec in recent memory. This is crazy bad. Report on the way. ????????????— Tavis Ormandy (@taviso) May 6, 2017
Google's Project Zero gives software vendors a 90-day deadline before bugs are made public but fortunately Microsoft handled this issue very rapidly. A patch for the Malware Protection Engine was released yesterday, you can check the security advisory over here.
Microsoft is releasing this security advisory to inform customers that an update to the Microsoft Malware Protection Engine addresses a security vulnerability that was reported to Microsoft.In a follow up comment on Twitter, Ormandy said he's blown away at how fast Microsoft handled this security crisis:
The update addresses a vulnerability that could allow remote code execution if the Microsoft Malware Protection Engine scans a specially crafted file. An attacker who successfully exploited this vulnerability could execute arbitrary code in the security context of the LocalSystem account and take control of the system.
Still blown away at how quickly @msftsecurity responded to protect users, can't give enough kudos. Amazing.— Tavis Ormandy (@taviso) May 9, 2017