Microsoft, one of the world’s largest technology companies, has taken the rare step of cutting off certain cloud and artificial intelligence services to a unit within the Israeli military, following mounting evidence that its products were being used to facilitate mass surveillance of Palestinians in Gaza and the West Bank. The move, announced on September 25, 2025, comes after months of investigative reporting and internal review, thrusting the company into the heart of a heated debate over the ethical responsibilities of global tech giants in conflict zones.
The decision was triggered by a series of high-profile investigations published earlier this year by The Guardian, +972 Magazine, and the Hebrew-language outlet Local Call. These reports detailed how Israel’s elite cyber warfare unit, Unit 8200, was leveraging Microsoft’s Azure cloud computing platform to store and analyze vast amounts of intercepted phone call data from Palestinians. According to The Guardian, following a 2021 meeting between Microsoft CEO Satya Nadella and Unit 8200’s commander, the Israeli military began collaborating with Microsoft to move large volumes of sensitive intelligence onto Azure, utilizing its extensive storage and computing capabilities.
By 2022, this partnership had enabled Unit 8200 to collect, play back, and scrutinize millions of phone calls made by Palestinians, with the data stored on Microsoft’s servers in the Netherlands and Ireland. The system, sources told The Guardian, played a direct role in guiding military operations and deadly airstrikes across the occupied territories. These revelations were corroborated by The Associated Press, which reported a dramatic spike in the Israeli military’s use of Microsoft products in the aftermath of the Hamas-led attacks on October 7, 2023. Internal Microsoft data reviewed by AP showed gigabytes of cloud storage and AI-powered language translation services being used to compile and cross-check intelligence for targeting purposes.
Microsoft’s response was swift but measured. Brad Smith, the company’s vice chair and president, wrote in a blog post to employees that Microsoft had “ceased and disabled a set of services to a unit within the Israeli Ministry of Defence” after its internal review found evidence supporting elements of The Guardian’s reporting. “First, we do not provide technology to facilitate mass surveillance of civilians. We have applied this principle in every country around the world, and we have insisted on it repeatedly for more than two decades,” Smith emphasized. “Second, we respect and protect the privacy rights of our customers.”
Smith made clear that Microsoft’s review did not involve accessing the content of its customers’ data—a nod to the company’s longstanding privacy commitments. Instead, the review focused on business records, such as financial statements and internal communications. The company found that the Israeli Ministry of Defense had been consuming significant Azure storage capacity in the Netherlands and using advanced AI services, evidence that supported the core of the allegations.
As a result, Microsoft informed the Israeli Ministry of Defense that it would “cease and disable specified subscriptions and their services, including their use of specific cloud storage and AI services and technologies.” Smith reiterated that Microsoft’s action was guided by its standard terms of service, which explicitly prohibit the use of its technology for mass surveillance of civilians. The company’s stance, he said, is non-negotiable: “We will hold every decision, statement, and action to this standard.”
Despite the strong language, Microsoft has been careful to limit the scope of its action. The company did not name the specific Israeli unit affected, though multiple news organizations have linked the move to Unit 8200. Microsoft also emphasized that its decision does not impact the company’s ongoing work to protect Israel’s cybersecurity, nor its broader operations in the Middle East under the Abraham Accords. “This does not impact the important work that Microsoft continues to do to protect the cybersecurity of Israel and other countries in the Middle East,” Smith told employees.
The Israeli government, for its part, has downplayed the impact of Microsoft’s decision. An Israeli security official told The Associated Press that the move would produce “no damage to the operational capabilities” of the Israel Defense Forces (IDF). The official, who spoke on condition of anonymity, suggested that the military could simply shift its operations to other cloud providers or alternative Azure subscriptions.
The controversy has also sparked significant unrest within Microsoft’s own workforce. The company has faced a wave of employee protests over its contracts with the Israeli government, resulting in the firing or arrest of more than a dozen staff members. Hossam Nasr, a former Microsoft employee and organizer with the activist group No Azure for Apartheid, called the company’s announcement a “significant and unprecedented win,” but argued that it fell far short of what is needed. “Microsoft has only disabled a small subset of services to only one unit in the Israeli military,” Nasr said. “The vast majority of Microsoft’s contract with the Israeli military remains intact.”
Microsoft’s move comes against a broader backdrop of international scrutiny over the role of technology companies in the Israeli-Palestinian conflict. Earlier this year, United Nations expert Francesca Albanese called on multinational firms to halt business with Israel, warning of potential complicity in war crimes committed in Gaza and the West Bank. Microsoft, Amazon, and Alphabet (Google’s parent company) were all named in the report, and each has faced internal dissent from employees concerned about their companies’ ethical responsibilities.
While Microsoft’s action has drawn praise from some quarters, critics argue that it represents only a partial step toward ensuring that powerful technologies are not used to violate human rights. The company’s outside legal review, commissioned after The Guardian’s reporting, is still ongoing. Smith has promised to share further information and lessons learned as the review progresses, stating, “I’ll share more information in the coming days and weeks, when it’s appropriate to do so.”
In the meantime, the episode has reignited debate over the limits of corporate responsibility in a world where technology is increasingly entwined with matters of war, surveillance, and civilian privacy. As governments and militaries become ever more reliant on cloud computing and AI, the choices made by companies like Microsoft will continue to shape not just the tech industry, but the lives of millions caught up in conflict.
