Microsoft has taken the unprecedented step of disabling cloud and AI services for a unit within Israel’s Ministry of Defense. The decision came after an internal review found evidence supporting media reports that the technology was being used to power a mass surveillance system targeting Palestinians in Gaza and the West Bank. This marks the first known instance of a major U.S. tech company withdrawing services from the Israeli military since the start of the war in Gaza .
The action specifically targets Unit 8200, the Israeli military's elite signals intelligence agency. The move follows a joint investigation by The Guardian, +972 Magazine, and Local Call, which revealed that Unit 8200 had built a surveillance program capable of intercepting and storing the content of millions of Palestinian mobile phone calls each day . Sources within the unit described the program's ambition with the phrase "a million calls an hour," amassing a vast repository of up to 8,000 terabytes of civilian communications data that was stored on Microsoft's Azure cloud platform in the Netherlands .
The surveillance project began after a 2021 meeting between Microsoft CEO Satya Nadella and the then-commander of Unit 8200, Yossi Sariel . Internal Microsoft documents described the partnership as a "critical" business opportunity and an "incredibly powerful brand moment" . However, the investigation revealed that the near-limitless storage capacity provided by Azure enabled a shift from targeted surveillance of suspects to the indiscriminate collection of an entire population's communications, a capability Unit 8200 lacked on its own servers .
According to intelligence sources, the surveillance system was not merely for intelligence gathering; it had been used during the Gaza offensive to help research and prepare for deadly airstrikes . The revelations sparked significant internal and external pressure on Microsoft, leading to employee protests at its headquarters and a campaign by the group "No Azure for Apartheid" . This pressure intensified amid a UN commission of inquiry's conclusion that Israel has committed genocide in Gaza, a charge Israel denies but which has been supported by many experts in international law .
In a communication to staff, Microsoft President Brad Smith stated the company does not provide technology to facilitate the mass surveillance of civilians and confirmed the disabling of specified cloud storage and AI services . He acknowledged the role of media reporting in bringing to light information the company could not access due to its customer privacy commitments . Importantly, this action does not affect Microsoft's broader commercial relationship with the Israeli military, which remains a longstanding client . Reports indicate Unit 8200 had already moved the massive surveillance dataset to another cloud platform, Amazon Web Services, before Microsoft's decision was enacted .