Microsoft restricts Israel military’s access to cloud and AI services over mass-surveillance reports
Company says an internal review found its tools were used in violation of terms of service; action targets a specific unit amid ongoing investigations.
Microsoft said Thursday it had disabled services to a unit within the Israeli military after a company review determined its artificial intelligence and cloud computing products were being used to help carry out mass surveillance of Palestinians. The action, disclosed by Brad Smith, the company’s president and vice chair, represents an escalation in efforts to enforce compliance with its terms of service amid scrutiny of Microsoft’s role in the Gaza war.
The move comes after reporting by The Associated Press and The Guardian earlier this year about how the Israeli Defense Forces used Microsoft’s Azure cloud to aid operations in Gaza and across the West Bank. Internal Microsoft data reviewed by AP showed extensive use of cloud storage and AI-enabled translation services by Israeli buyers, with the AP detailing how translated transcripts and phone data were ingested into in-house AI systems for potential targeting. Multiple Azure subscriptions linked to Unit 8200, the Israeli Army’s elite cyber warfare unit, were cited in the reporting.
Microsoft acknowledged in May that it had sold advanced AI and cloud computing services to the Israeli military during the Gaza war and aided in efforts to locate and rescue Israeli hostages. The company said an internal review found no evidence that its Azure platform was used to target or harm people. After The Guardian reported in August that the commander of Unit 8200 had met directly with Microsoft chairman and CEO Satya Nadella in 2021, Microsoft commissioned a second review by an outside law firm. Brad Smith, speaking Thursday, said the probe had uncovered evidence that its products were being used in violation of the company’s terms of service, though he did not name the specific unit involved. Microsoft declined to answer detailed questions from AP about the unit or how it would ensure the Israeli military would not shift mass-surveillance operations to other Azure subscriptions.
An Israeli security official told AP that Microsoft’s move would produce “no damage to the operational capabilities” of the Israel Defense Forces, speaking on condition of anonymity consistent with military protocol. Hossam Nasr, a former Microsoft employee who has been involved with protests over the company’s role in Gaza, called Thursday’s announcement a “significant and unprecedented win.” He noted that the action targeted a subset of the relationship and that many contracts between the Israeli military and Microsoft remain intact. Advocacy groups such as No Azure for Apartheid have pressed for broader action and greater transparency from the company.
As the situation unfolds, technology and policy observers say the episode highlights the broader responsibility of cloud and AI providers operating in conflict zones. The case has spurred renewed questions about how vendors monitor the end-use of their platforms, what constitutes acceptable use, and how authorities verify ongoing compliance when systems are repurposed for mass surveillance. The AP’s reporting and Microsoft’s responses illustrate the friction between security needs, civilian rights, and corporate governance in an era of interoperable, cross-border technology platforms.