Microsoft has disabled a set of cloud and artificial-intelligence services used by a unit within Israel’s Ministry of Defence after an internal review found elements of reporting that alleged the company’s Azure platform was being used in the mass surveillance of Palestinians.
The company’s vice-chair and president, Brad Smith, told staff that Microsoft had “ceased and disabled a set of services” to a Defence Ministry unit following a review launched after investigative reporting in August. The move, announced on Sept. 25, 2025, marks one of the clearest steps by a major U.S. technology firm to limit the tools provided to an allied military over human-rights concerns.
The action came after a joint investigation by The Guardian and partner outlets published in August said Israel’s Unit 8200 — the military’s elite signals-intelligence corps — had used Microsoft Azure to store and process large volumes of intercepted Palestinian mobile-phone calls and other communications. That reporting alleged the existence of a program that stored terabytes of recordings and analysis on Microsoft infrastructure, including data kept in European data centres.
In his memo, Smith said Microsoft’s review corroborated aspects of the reporting and that the company had concluded certain uses violated its terms of service, which prohibit the use of Microsoft technology for mass civilian surveillance. He emphasized that the company’s review relied on its own business records — not by accessing customer content — and that the disabled services were targeted to address the findings.
Microsoft did not say which specific services were turned off or identify the unit by name in public statements. The company stressed the decision was limited in scope and that other parts of its commercial and cybersecurity relationship with Israel remain in place. Officials at Israel’s Ministry of Defence did not immediately comment when contacted by international news organizations.
The announcement follows weeks of internal pressure from Microsoft employees and external activism. Workers at the company staged protests and sit-ins over Microsoft’s commercial relationship with the Israeli military amid heightened scrutiny of Israel’s operations in Gaza and the occupied West Bank. Human-rights groups and advocacy campaigns that had called on tech firms to refuse services used for mass surveillance praised the move but said it fell short of a complete break with Israeli military contracts.
Legal and ethical experts said Microsoft’s decision could set an important commercial precedent. “This is an uncommon step for a major cloud provider and signals that contract compliance and human-rights risk assessments are becoming operationally consequential,” said a data-privacy analyst who reviewed the public statements. Policy observers noted, however, that the episode highlights the complexities of policing how sophisticated cloud and AI services are used — especially when systems are integrated into third-party operations and allied governments.
The Guardian’s earlier investigation alleged the project had been used to surface intelligence that assisted military targeting in Gaza and the West Bank. Microsoft’s action does not resolve those wider allegations, which are the subject of continuing scrutiny from journalists, rights groups and lawmakers in multiple countries. The company said it will continue to work with customers and regulators to ensure services are not used to facilitate mass civilian surveillance.
For Microsoft, the decision comes as U.S. and European tech companies face increased pressure to weigh commercial ties against ethical and human-rights risks posed by powerful cloud, data-storage and AI capabilities. The company’s memo framed the suspension as a narrow, principle-led enforcement of its terms, while stopping short of broader divestment. Observers say the long-term fallout will depend on what details emerge from further internal reviews and whether other providers take similar enforcement steps.
