Microsoft Disables AI and Cloud Services to Israeli Military Unit

On Thursday, Microsoft announced it had disabled access to certain services used by a unit within the Israeli military after an internal review found violations of its terms of service. The decision comes amid growing scrutiny over how Microsoft’s artificial intelligence (AI) and cloud platforms, particularly Azure, were being used to conduct mass surveillance operations in Gaza and the West Bank.

The move follows investigations by The Associated Press and The Guardian, which detailed how Israeli defense operations were leveraging Microsoft’s technologies to collect, process, and analyze surveillance data.

Investigations and Initial Findings

An AP report from February revealed that the Israeli military’s reliance on Microsoft cloud services sharply increased after Hamas’ October 7, 2023 attacks. Internal data showed a surge in Azure storage use and AI-enabled translation services, helping convert intercepted phone calls and messages into actionable intelligence.

The information, once processed, was reportedly cross-referenced with Israel’s own AI-driven systems to support targeting decisions for military operations. Additional reporting from The Guardian, in collaboration with +972 Magazine and Local Call, found that Unit 8200, Israel’s elite cyber and signals intelligence unit, had direct ties to Microsoft leadership. A 2021 meeting between Unit 8200’s commander and Microsoft CEO Satya Nadella was cited as part of broader collaboration.

Microsoft’s Reviews and Response

In May, Microsoft admitted selling advanced AI and cloud services to the Israeli military but claimed no evidence suggested Azure had been used to directly harm individuals. However, after The Guardian’s later exposé, the company commissioned an external legal review.

Brad Smith, Microsoft’s vice chair and president, confirmed that the review uncovered evidence of violations of its service terms. As a result, Microsoft disabled services linked to an unspecified Israeli unit, though it stopped short of naming Unit 8200 directly. Smith emphasized that the company is working to enforce compliance across all government and military accounts.

Reactions and Implications

Israeli defense officials, speaking anonymously, downplayed the impact, claiming that Microsoft’s decision would cause “no damage to operational capabilities.” However, activists and former employees saw the move as a breakthrough.

Hossam Nasr, an organizer with the group No Azure for Apartheid and one of several employees dismissed for protesting Microsoft’s involvement, described the action as “a significant and unprecedented win.” Still, he argued it fell short, noting that the majority of Microsoft’s contracts with the Israeli military remain unaffected.

Broader Concerns

This case underscores the ethical challenges global tech firms face when providing cloud and AI services in conflict zones. While Microsoft’s intervention marks an unusual step in enforcing its own compliance standards, critics argue that partial restrictions leave larger questions unanswered: how companies ensure their technologies are not repurposed for surveillance, targeting, or human rights violations.

As external investigations continue, Microsoft’s decision may set a precedent for how technology providers handle government misuse of advanced digital infrastructure.