Microsoft announced on 26 September 2025 that it would disable specific subscriptions and services for the Israeli Ministry of Defense. The decision comes after multiple reports revealed that its Azure cloud and artificial intelligence tools had been utilized for surveillance operations against Palestinians in Gaza and the occupied West Bank.
Brad Smith, Microsoft vice chair and president, stated that an external review of company communication records and financial data substantiated portions of the allegations. The firm emphasized that its terms of service prohibit the use of its platforms for mass surveillance of civilian populations. This triggered the partial service suspension.
The change followed an August 2025 investigation by The Guardian, +972 Magazine, and Local Call. Their reporting indicated that Unit 8200, the elite signals intelligence division of the Israeli military, used Microsoft cloud services to intercept, store, and analyze enormous volumes of Palestinian communications. These included phone calls and text messages.
Documents and insider testimonies suggested that in 2021, Microsoft Chief Executive Officer Satya Nadella met with Yossi Sariel, then head of Unit 8200. The discussions reportedly involved storing Israeli intelligence data on Azure. Unit 8200 allegedly created a surveillance architecture capable of processing communications on a massive scale soon after.
This surveillance system reportedly expanded to sweep millions of communications from 2022 onwards. Advanced AI capabilities translated, transcribed, and cross-referenced intercepted data. Human rights concerns were raised after insider accounts claimed the system supported military targeting decisions that contributed to air strikes and other lethal operations.
Microsoft previously acknowledged in May 2025 that it sold advanced AI services to Israel to aid hostage recovery following the October 2023 Israel-Hamas conflict. However, the company then claimed it found no evidence of misuse against civilians. The recent investigation and subsequent decision provided new details contradicting those earlier assurances.
The company stated that it cannot always determine how customers employ cloud services due to privacy restrictions. But internal documents and insider accounts indicated employees knew that Israel used Azure for sensitive intelligence. Unit 8200 insiders claimed the system effectively monitored Palestinians continuously without pause or limitation.
Note that the announcement did not specify which services were suspended, nor did it clarify which military divisions were affected. Critics argued the decision remains limited, primarily targeting one component of Israeli operations. It is also unclear whether the restrictions would meaningfully diminish the surveillance capabilities of Israel’s defense establishment.
Reactions were divided. One unnamed Israeli official downplayed the measure, insisting it would cause no operational damage. Meanwhile, activist groups such as “No Azure for Apartheid” called the move an unprecedented victory. It is also worth mentioning that several former Microsoft employees warned that the company had not gone far enough.
Internal dissent has troubled Microsoft for months. Several employees were terminated in 2025 after protesting business dealings with Israel. Others resigned in opposition. The company had tapped external reviews from law firm Covington and Burling and additional technical consultants to address the controversy before reaching its current decision.
The development must also be understood in the broader context of Israeli surveillance practices. Rights groups have documented systems, including Red Wolf, Blue Wolf, and Wolf Pack, which collect and analyze the personal data of Palestinians. These tools enable pervasive monitoring at checkpoints and in occupied territories without informed consent.