Microsoft has restricted some of its cloud and AI services to the Israeli military after reports alleged that the military used its technology for mass surveillance of Palestinians. The move follows an investigation by The Guardian, +972 Magazine, and Local Call, which claimed Unit 8200, Israel’s cyber intelligence division, stored and analyzed millions of phone calls using Microsoft’s Azure platform.
Brad Smith, the company’s vice chair and president, confirmed the action in a blog post. He said Microsoft had “ceased and disabled a set of services” that appeared to breach its terms of service. According to Smith, the firm applied two guiding principles during its review: refusing to support mass civilian surveillance and protecting customer privacy.
The reports described how, since 2022, Unit 8200 relied on Azure’s large-scale storage and computing power to collect and process communications data. Sources alleged the system also assisted in targeting air strikes in Gaza and the West Bank. Reports indicated that data centers in Ireland and the Netherlands stored much of the information.
This marks the first time Microsoft has publicly acknowledged canceling certain Israeli defense subscriptions, including cloud storage and AI technologies. However, Smith did not specify which military division the decision directly affected.
The Associated Press previously noted a sharp increase in Microsoft product use by Israel’s armed forces after the October 7, 2023, Hamas-led attack. At the time, Microsoft admitted selling advanced AI and cloud tools but insisted it found no evidence that civilians suffered harm from their deployment.
The company has since launched two reviews, one internal and one conducted by an outside law firm. Smith said the ongoing investigation had already identified violations of service terms, prompting the recent suspension.
For activists inside and outside Microsoft, the step represents a partial victory. Dismissed employee Hossam Nasr, who protested against the company’s involvement in the Gaza war, described it as “unprecedented” while stressing that most military contracts remain untouched.
The decision highlights the growing tension between global cloud providers and the ethical use of their technology, particularly in conflict zones where civilian data and security remain at risk.
