Key Takeaways Microsoft terminated cloud and AI services to an Israeli military unit after finding evidence of mass surveillance of Palestinians. The decision followed a Guardian investigation reveali...
Microsoft has cut off access to some of its cloud computing and artificial intelligence services for a unit within Israel's Ministry of Defense, following an internal investigation that found evidence supporting allegations of mass surveillance of Palestinians.
The decision, announced Thursday by Microsoft President Brad Smith, comes after months of employee protests and media scrutiny over the company's contracts with the Israeli military during the ongoing war in Gaza.
The action stems from an August 6 investigation by The Guardian, +972 Magazine, and Hebrew-language outlet Local Call, which reported that Israel's elite cyber warfare unit, Unit 8200, was using Microsoft's Azure cloud platform to store phone call data obtained through mass surveillance of Palestinians in Gaza and the occupied West Bank.
Smith wrote in a Thursday blog post that the company had "ceased and disabled a set of services" to a unit within the Israeli Ministry of Defence in response to an August 6 joint investigation by The Guardian newspaper, +972 Magazine, and Hebrew-language outlet Local Call.
"While our review is ongoing, we have found evidence that supports elements of The Guardian's reporting," Smith wrote in an email to Microsoft employees. The review, Smith said, focused on business records, financial statements, internal documents and other records without accessing the content of the stored material.
The investigation revealed that following a 2021 meeting between Microsoft CEO Satya Nadella and Unit 8200's leader Yossi Sariel, an agreement was reached to collaborate on moving large volumes of sensitive intelligence material into the company's Azure platform.
The process, which has been operational since 2022, allowed Unit 8200 to utilise Azure's near-limitless storage capacity and computing power to collect, play back and analyse the phone calls of millions of Palestinians.
The surveillance operation reportedly handled massive amounts of data, with sources describing the project's goal as storing "a million calls an hour.
" Prior to its partnership with Microsoft, Unit 8200 only had the storage capacity on its internal servers to house recordings of the phone calls of tens of thousands of Palestinians whom the army defined as "suspects."
A large amount of the data on Palestinians appeared to be stored on Microsoft's Azure servers located in the Netherlands and Ireland.
The cloud-based system reportedly helped guide deadly air strikes and shaped operations across the occupied Palestinian territory.
Microsoft's investigation confirmed key elements of these reports. During the investigation, the company says it found evidence that supports elements of the investigation from the news outlets, including Israel's "consumption of Azure storage capacity in the Netherlands and the use of AI services."
Smith emphasized Microsoft's longstanding policy against facilitating mass surveillance.
"First, we do not provide technology to facilitate mass surveillance of civilians. We have applied this principle in every country around the world, and we have insisted on it repeatedly for more than two decades," he said.
The decision comes after sustained employee activism, including protests by the "No Azure for Apartheid" group.
In August, protesters occupied Smith's office at Microsoft's Redmond headquarters, and the company has reportedly fired multiple employees in recent months for their activism related to Microsoft's contracts with Israel.
Hossam Nasr, one of more than a dozen Microsoft employees fired or arrested over protests against the company's involvement in the Gaza war, hailed the move as an "unprecedented win", but said the "vast majority of Microsoft's contract with the Israeli military remains intact".
"Microsoft has only disabled a small subset of services to only one unit in the Israeli military. The vast majority of Microsoft's contract with the Israeli military remains intact," a representative for No Azure for Apartheid told NBC News.
While Microsoft terminated specific services, the action appears limited in scope.
Smith did not specify which services were discontinued but confirmed that "specific cloud storage and AI services and technologies" had been cancelled for certain Israeli Defence Ministry subscriptions.
"This does not impact the important work that Microsoft continues to do to protect the cybersecurity of Israel and other countries in the Middle East, including under the Abraham Accords," Smith noted.
According to The Guardian, Unit 8200 has reportedly already moved to transfer the surveillance data to Amazon Web Services instead. An Israeli security official told CNN that "There is no damage to the operational capabilities of the IDF."
The Israeli Defense Ministry declined to comment on Microsoft's decision. Israel's military campaign in response to Hamas' October 7, 2023 attacks has killed nearly 65,000 Palestinians, according to Palestinian health officials.
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