Microsoft has halted the Israeli military’s access to its technology following revelations that its Azure cloud platform was being used to operate a vast surveillance system intercepting millions of Palestinian phone calls each day in Gaza and the West Bank. According to sources familiar with the matter, the company informed officials last week that Unit 8200, Israel’s elite intelligence agency, had violated its terms of service by storing the massive trove of communications data on Azure. The action marks the first known case of a major US technology company withdrawing services from the Israeli military since the start of the war on Gaza.
The decision came after a joint investigation by the Guardian, +972 Magazine and Local Call exposed how Microsoft’s technology had been integrated into an extensive data collection and analysis programme. The project reportedly began after a 2021 meeting between Microsoft chief executive Satya Nadella and Unit 8200’s then commander, Yossi Sariel, setting the stage for transferring large volumes of sensitive intelligence material into Azure. Equipped with Azure’s vast storage and computing capabilities, the unit built a system capable of intercepting and analysing the content of cellular calls of an entire population, internally referred to by officers as “a million calls an hour.” Sources say the intercepted calls, estimated at 8,000 terabytes of data, were stored in a Microsoft datacentre in the Netherlands until being swiftly moved out after the Guardian published its findings.
Microsoft subsequently launched an urgent external review to reassess its relationship with Unit 8200. Initial findings prompted the company to cut off access to some of its cloud storage and AI services. In an email to staff seen by the Guardian, Microsoft’s vice-chair and president Brad Smith stated that the company “does not provide technology to facilitate mass surveillance of civilians” and confirmed that it had “ceased and disabled a set of services to a unit within the Israel ministry of defense.” Smith emphasised that Microsoft had applied this principle consistently in every country for more than two decades. Protests had erupted at Microsoft’s US headquarters and a European datacentre following the Guardian’s investigation, while employee and investor groups such as No Azure for Apartheid called on the company to end its ties with Israel’s military.
Although Microsoft’s decision halts a three-year arrangement that allowed Unit 8200 to run its surveillance programme using Azure, it does not affect the company’s wider commercial relationship with the Israel Defense Forces, which will retain access to other services. Intelligence sources indicated that after Microsoft’s action, Unit 8200 sought to transfer its surveillance data to Amazon Web Services, though neither the IDF nor Amazon responded to requests for comment. The revelations have also sparked debate in Israel over the security implications of hosting sensitive military data in third-party clouds abroad. The surveillance system initially focused on the West Bank but was later deployed in Gaza to help prepare airstrikes during the ongoing offensive, which according to reports has killed tens of thousands of Palestinians and caused a severe humanitarian crisis.
Microsoft executives, including Nadella, were reportedly unaware that Unit 8200 planned to store intercepted Palestinian calls on Azure. The company’s latest inquiry, overseen by US law firm Covington & Burling, examined internal documents, emails and staff communications without accessing customer data. Smith acknowledged in his note to employees that reporting by the Guardian had brought to light information Microsoft could not access due to its privacy commitments. The company’s review is ongoing but its initial findings were sufficient to terminate Unit 8200’s access to key cloud and AI services, signalling a major shift in how large technology providers manage their relationships with military clients accused of violating civilian privacy.
Follow the SPIN IDG WhatsApp Channel for updates across the Smart Pakistan Insights Network covering all of Pakistan’s technology ecosystem.
