Microsoft has withdrawn access to some of its cloud and artificial intelligence services from a unit of the Israeli military after evidence emerged that its technology had been central to a mass surveillance program targeting Palestinians in Gaza and the West Bank.
The decision follows months of scrutiny triggered by investigative reports that revealed how the military’s intelligence wing, Unit 8200, was storing and processing enormous volumes of civilian communications through Microsoft’s Azure platform.
Surveillance Program and Scale
The program relied on the interception of millions of Palestinian phone calls each day. Intelligence officers could capture, replay, and analyze conversations with the help of AI-driven tools hosted on Microsoft’s infrastructure. Sources described the system as capable of handling an immense flow of information, with internal slogans pointing to the goal of recording nearly a million calls per hour.
According to documents cited in investigations, the collected material reached several thousand terabytes in scale and was initially stored in a Microsoft data center located in the Netherlands. That arrangement gave Israeli intelligence officers near-limitless access to analyze the material, with applications ranging from general monitoring of daily life in the occupied territories to the identification of potential targets in Gaza.
Corporate Response and Internal Pressure
Microsoft’s decision came after an independent review ordered earlier this year to assess whether its services were being misused. The company concluded that a military client had violated its rules by using Azure infrastructure for the systematic surveillance of a civilian population. Employees and investors had also raised concerns about the firm’s role in providing technology for military operations, particularly as the humanitarian toll of the Genocide in Gaza has escalated.
The decision was relayed to Israel’s Ministry of Defense in recent days, with Microsoft informing officials that subscriptions linked to Unit 8200 would be terminated. The measures include revoking access to certain cloud storage capabilities and restricting the use of AI-powered services. The company stressed that its global policy forbids enabling mass civilian surveillance and that this principle applies across all regions where it operates.
Data Relocation and Alternative Providers
After the initial reporting earlier this summer, Unit 8200 began transferring large portions of stored communications out of Microsoft’s European servers. Intelligence sources indicated that the data, estimated at thousands of terabytes, was moved to alternative infrastructure, with Amazon Web Services named as a potential new host. Amazon has not publicly commented on whether it has agreed to manage the repository.
The relocation underscored the sensitive nature of hosting military surveillance data on foreign commercial platforms, raising questions within Israel about the risks of relying on overseas providers for operations tied to national security.
Historical Ties and Earlier Reviews
Collaboration between Microsoft and the Israeli military intensified in recent years. In 2021, company executives met with senior commanders of Unit 8200 to discuss technical cooperation, including the creation of a segregated environment within Azure to handle intelligence workloads. Those arrangements were later examined by Microsoft after internal leaks suggested their scale.
An earlier review carried out in mid-2024 had initially cleared the company, with investigators saying they found no proof that Azure tools were being used to harm civilians. However, subsequent evidence gathered by reporters and advocacy groups contradicted those findings, prompting a second inquiry that resulted in this week’s termination.
Reaction from Activists and Workforce
The revelations sparked widespread protests from Microsoft staff as well as campaign groups critical of the company’s ties to Israel’s military. Demonstrations were staged both at US headquarters and at European sites, with a worker-led initiative calling itself “No Azure for Apartheid” pushing for a full severance of contracts with the Israeli defense sector.
Some employees also faced disciplinary action after staging direct protests inside company offices. Organizers described Microsoft’s latest move as a step forward but argued that it addressed only a fraction of the firm’s relationship with Israel’s defense establishment, since other contracts remain in place.
Critics argue that Microsoft’s actions reveal a deep moral failure. They note the company has never condemned Israel’s genocide in Gaza, even while its technology was used to support surveillance tied to military operations there. Nor has it apologized for enabling that system or acknowledged that employees who protested were standing on the right side of history. Instead, it protected contracts and avoided accountability. Activists say this silence shows a corporation unwilling to choose between right and wrong, exposing a culture where profit outweighs morality. For many, the only meaningful response is to boycott Microsoft and other firms that empower such actions, until corporate greed and complicity give way to a new morality that values human life over corporate gain.
Broader Context and Implications
The decision marks the first known case of a major US technology company suspending services previously provided to the Israeli military since the beginning of the Genocide in Gaza. It comes against the backdrop of international criticism over the humanitarian crisis in the territory, where tens of thousands of Palestinian civilians have been killed during nearly two years of bombardment and siege.
Legal experts and human rights monitors have noted that the surveillance project illustrates the degree to which advanced cloud infrastructure from American companies has been integrated into military campaigns. For Microsoft, the move represents both a corporate governance decision and a response to reputational risks, as it seeks to demonstrate consistency in applying its own standards.
Ongoing Reviews
Microsoft has said that its inquiry is still continuing and that additional measures may follow depending on new findings. The company emphasized that the investigation did not involve examining customer data directly but was based on internal records, correspondence, and contractual details. Senior executives also acknowledged that earlier assessments may have been incomplete, partly due to limited transparency from staff working on the Israeli contracts.
While Microsoft’s wider commercial agreements with Israel remain intact, the suspension of specific services linked to Unit 8200 highlights a shift in how global technology firms are forced to balance commercial interests, ethical guidelines, and mounting pressure from employees and civil society. The long-term outcome may depend on whether other cloud providers face similar scrutiny over their role in hosting sensitive military operations.
Notes: This post was edited/created using GenAI tools. Image: DIW-Aigen.
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