Microsoft has moved to suspend a key part of its partnership with the Israeli military following reports that its technology was misused for mass surveillance of Palestinian civilians. The company confirmed it has disabled access to certain cloud and AI services used by Unit 8200, Israel’s elite intelligence division, after independent investigations uncovered widespread monitoring operations.

The decision followed a joint exposé by The Guardian, +972 Magazine, and Local Call, which revealed Unit 8200’s use of Microsoft’s Azure cloud platform to intercept and store millions of Palestinian phone calls every day. Internally, the system was described with the chilling phrase, “A million calls an hour.”

Microsoft’s vice-chair and president, Brad Smith, told employees that the company had “ceased and disabled a set of services to a unit within the Israel ministry of defense” after discovering that its technology had been deployed in ways inconsistent with company policy.

Surveillance at Unprecedented Scale

Investigators found that Unit 8200 was using a customized Azure environment to process intercepted calls, later transferring the data to European servers in the Netherlands. The repository reportedly grew to more than 8,000 terabytes of sensitive conversations, which were then analyzed with AI tools. Following the exposé, Israeli intelligence reportedly shifted the data out of the EU, with speculation it could be moved to Amazon Web Services. Both the IDF and Amazon declined to comment.

The relationship between Microsoft and Unit 8200 deepened after a 2021 meeting between Microsoft CEO Satya Nadella and then-unit commander Yossi Sariel. Initially, the surveillance efforts focused on the West Bank, home to around three million Palestinians. Later, the system allegedly aided targeting operations during Israel’s Gaza offensive, with Azure’s scale enabling interception of calls across an entire population.

Microsoft Under Pressure

The revelations triggered an internal review of Microsoft’s dealings with the Israeli military. An external inquiry by law firm Covington & Burling examined internal records, though customer data remained off-limits due to privacy obligations.

Smith emphasized Microsoft’s long-standing principles: “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.”

The company’s decision comes at a time of intensifying scrutiny. Protests at Microsoft’s headquarters and European datacenters, as well as campaigns by employee groups like No Azure for Apartheid, have urged the company to end military contracts. A senior Microsoft executive reportedly told Israel’s defense ministry that evidence supported elements of The Guardian’s reporting.

Broader Implications

Although access to the affected cloud storage and AI services has been suspended, Microsoft has not severed all ties with the Israeli Defense Forces. Other contracts and services remain active.

The case highlights the growing ethical dilemmas facing global tech firms as military forces worldwide increasingly rely on commercial cloud infrastructure. For Palestinians, the revelations underscore how foreign technology platforms have been embedded in surveillance and targeting operations, deepening concerns about civilian privacy and safety in conflict zones.

Microsoft’s suspension marks the first known instance of a major U.S. technology company cutting off services to the Israeli military since the escalation in Gaza, where the humanitarian toll continues to mount.