Microsoft cuts off some services used by Israeli military unit after mass-surveillance findings

Microsoft has cut off some services used by a unit of Israel's Ministry of Defence after an internal review linked its technology to mass surveillance of Palestinians in Gaza, a practice the company says violates its terms of service. The action was announced by Brad Smith, the company's president, who said the decision was prompted by a Guardian investigation published last month that detailed how the unit used Microsoft’s cloud platform, Azure, to store and analyze vast amounts of intercepted calls and other communications.

Microsoft said the move would not affect other work it does with Israel and that the review remains ongoing. In a message to staff, Smith emphasized that the company’s review is guided by a commitment to privacy and said the steps were aimed at ensuring that Microsoft’s services are not used for mass surveillance of civilians. He also noted that the company would share more information in the coming days and weeks when appropriate.

The Guardian report, produced in collaboration with Israeli-Palestinian outlet +972 Magazine and Local Call, described how the unit leveraged Azure’s storage capacity to create a large trove of communications, enabling its operators to collect, play back and analyze calls with broad reach. The investigative work suggested that the breadth of data allowed the unit to shape military operations in Gaza and the West Bank. Microsoft has said its review did not involve accessing customer content, but it found other evidence supporting elements of the article, including evidence of substantial storage usage in the Netherlands and the deployment of AI services.

As part of the findings, Microsoft informed the Israeli Ministry of Defence that it would “cease and disable” certain subscriptions and their services, including the use of specific cloud storage and AI services and technologies, to ensure compliance with its terms of service. The company stressed that the decision is narrowly focused on preventing mass surveillance of civilians and is not a blanket rebuke of all technology ties with the Israeli government. Smith’s letter to staff underscored a careful balancing act between the company’s privacy commitments and its broader business relationships with Israel.

The disclosures come amid a broader, long-running debate over multinational tech firms’ involvement with Israel, particularly in relation to Gaza and the occupied territories. Earlier this year, a United Nations expert urged dozens of multinational companies to stop doing business with Israel, warning that continued ties risked contributing to possible war crimes in Gaza and the West Bank. Microsoft was among the companies named in the expert report presented to the UN human rights council, a list that also included Amazon and Alphabet. The spotlight on Microsoft’s Israel work has been heightened by internal employee protests, some of which prompted the company to take other actions against staff members who publicly criticized its Israeli contracts.

Microsoft said it launched its own internal review in response to the Guardian article and noted that the review did not extend to reviewing customer content. Instead, the assessment focused on metadata, usage patterns and the scope of AI-enabled features. The company has not disclosed a final timeline on further policy changes, but indicated that additional steps could follow as the review concludes. In the meantime, the firm is continuing to evaluate how its products are used in sensitive security contexts and seeking to ensure strict adherence to privacy and human-rights considerations.

The Guardian’s reporting highlighted the tension within Microsoft over its work with national security agencies and governments around the world. Employee activism around Israel-related contracts has, at times, pressured management to reassess partnerships and to implement more stringent controls on how technologies like cloud storage and AI services are deployed. Microsoft’s response to the Guardian story — including the decision to disable certain capabilities — reflects the company’s intent to demonstrate that it will enforce its terms of service when surveillance uses are broad or targeted at civilians.

Industry observers say the episode underscores the challenges multinational tech firms face as they balance lucrative government contracts with ethical and legal obligations. Critics argue that the very capabilities that enable rapid data collection and analysis can also enable mass surveillance and civil rights abuses, creating risk for the companies involved. Proponents, meanwhile, caution that cutting off access to advanced cloud and AI tools could hamper legitimate security and public-safety efforts in some contexts. Microsoft’s action appears to be a measured step aimed at signaling that the company will not tolerate the misuse of its platforms for mass civilian surveillance.

The company’s approach to handling the matter — conducting an internal review, publicly detailing the steps taken, and promising ongoing updates — is being closely watched by other technology firms and policy-makers. The Guardian’s reporting, which has spurred regulatory and civil-society scrutiny, continues to influence discussions about corporate responsibility, the role of cloud providers in conflict zones, and the safeguards needed to prevent misuse of advanced analytics and communications data. As Microsoft implements the disabling of specific services, observers will be watching for further clarifications on which products were restricted, how compliance will be verified, and what redress or safeguards will accompany any future collaboration with state entities.

In distant yet related fashion, the episode adds to a broader narrative about technology, intelligence, and ethics in the AI era. As cloud-based tools become more capable and accessible to governments and security agencies, the potential for both rapid response and civil-rights violations grows. For Microsoft, the priority appears to be preventing the use of its platforms for mass civilian surveillance while preserving its broader business relationships and remaining responsive to employee concerns and public scrutiny. Whether other tech giants follow suit with similar reviews and restrictions remains an open question as governments and civil-society groups press for stronger safeguards around the deployment of cloud and AI technologies in conflict settings.