Microsoft disables set of cloud and AI services used by Israeli military after Gaza surveillance review

Microsoft said Thursday that it has disabled a set of cloud and AI services used by a unit within the Israel Defense Forces after an internal review found preliminary evidence aligned with media reports of a Gaza surveillance system. The action targets subscriptions tied to the Israeli Ministry of Defense and its use of particular cloud storage and AI tools, and Microsoft stressed that the move does not affect its broader cybersecurity services in Israel or other countries in the region.

The review was prompted by a Guardian report that a unit of the Israel Defense Forces used Microsoft’s Azure cloud to store large volumes of mobile phone call recordings from Palestinians in the Israeli-occupied West Bank and Gaza. The Guardian, in partnership with Israeli-Palestinian publication +972 Magazine and Hebrew-language outlet Local Call, outlined how the system allegedly relied on cloud storage regions in the Netherlands and on AI services to process data. Microsoft said it found evidence that corroborates elements of that reporting, while the investigation is ongoing.

Brad Smith, Microsoft's president, said the company would cease the specific subscriptions and related services and that it would continue to review the situation. He added that Microsoft does not provide technology to facilitate mass surveillance of civilians.

Microsoft said the decision is limited to the IMOD unit and does not reflect a broader stance toward Israel, the Middle East, or the security contractor market. The company also noted that the action does not impair its other services, including cybersecurity offerings that it provides to Israel and other governments.

Separately, Microsoft said that in late August it fired four employees who took part in demonstrations about the company’s ties to Israel on its campuses, including two who joined a sit-in at the office of the company’s president. The company said the terminations were for policy violations, and that the protests had created safety concerns.

The Guardian’s reporting, plus coverage from the partner outlets, highlighted how a major cloud provider’s technology could be involved in surveillance programs in conflict zones. The incidents have intensified scrutiny of technology firms’ responsibility for how cloud and AI tools are used by military and security agencies, especially in areas with fragile civilian protections and ongoing hostilities.

Microsoft’s actions come as the company continues to expand its AI and cloud offerings while facing ongoing questions about dual-use technologies and governance. The company said it will continue to engage with regulators, human rights groups, and stakeholders to ensure appropriate use of its tools and to prevent activities that would amount to mass surveillance of civilians.

Analysts note the episode underscores the growing pressure on tech firms to monitor how cloud services may be deployed by governments in sensitive regions. Friday’s move by Microsoft could set a reference point for how other providers respond when reporting surfaces evidence of surveillance-related use of their platforms.