Microsoft cuts off cloud and AI services for Israel defense unit after review links them to Palestinian surveillance

Microsoft

Microsoft has disabled cloud storage and AI services for a unit within the Israel Ministry of Defense (IMOD) following an internal review into allegations of surveillance of Palestinians. The move comes after The Guardian reported on August 6 that the Israel Defense Forces (IDF) were allegedly using Microsoft Azure to store data files of phone calls obtained through mass surveillance of civilians in Gaza and the West Bank.

Brad Smith, Vice Chair and President of Microsoft, informed employees of the decision in an internal note. “We do not provide technology to facilitate mass surveillance of civilians,” he wrote, stressing that this principle has guided the company’s policies globally for over two decades.

The review, launched on August 15, examined internal business records, financial documents, contracts, and communications rather than customer data. “At no point has Microsoft accessed IMOD’s customer content,” Smith explained. “Rather, the review has focused on Microsoft’s own business records.”

Smith confirmed that evidence supported elements of The Guardian’s reporting, including “information relating to IMOD consumption of Azure storage capacity in the Netherlands and the use of AI services.”

Based on these findings, Microsoft informed IMOD that it would “cease and disable specified IMOD subscriptions and their services, including their use of specific cloud storage and AI services and technologies.” Smith said this step ensures compliance with Microsoft’s terms of service and its broader commitment to privacy rights.

Smith emphasized that the decision does not affect Microsoft’s wider security commitments in the region. “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,” he noted.

He also credited The Guardian for its reporting: “Its reports were based in part on sources outside Microsoft that had information we could not access in light of our customer privacy commitments. This helped inform our review.”

The review is ongoing, and Smith pledged to share more updates. “Microsoft will continue to be a company guided by principles and ethics. We will hold every decision, statement, and action to this standard. This is non-negotiable,” he said.