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Microsoft has terminated the Israeli military's access to cloud services that stored surveillance data from millions of Palestinian phone calls in Gaza and the West Bank, the company confirmed Thursday, following an external investigation into violations of its terms of service.
The decision affects Unit 8200, Israel's elite cyber intelligence agency, which had been using Microsoft's Azure cloud platform to store and analyze intercepted communications since 2021.
The termination follows reporting by The Guardian, +972 Magazine and Local Call that exposed the mass surveillance program.
Microsoft Vice Chair and President Brad Smith informed employees Thursday that the company had "ceased and disabled a set of services to a unit within the Israel Ministry of Defense," including cloud storage and artificial intelligence services.
The joint investigation, published in August, revealed that Unit 8200 had stored up to 8,000 terabytes of intercepted Palestinian phone calls in Microsoft's Netherlands data center — equivalent to approximately 195 million hours of audio.
Intelligence sources described the project's scale with an internal mantra: "A million calls an hour."
"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," Smith wrote in the employee communication.
The surveillance system collected phone calls from the West Bank's 3 million Palestinian residents and was later used during Israel's Gaza offensive to facilitate airstrike planning, according to intelligence sources.
Within days of the August investigation's publication, Unit 8200 transferred the surveillance data out of Microsoft's European servers. Intelligence sources told The Guardian the unit planned to move the data to Amazon Web Services' cloud platform.
The three-year partnership between Microsoft and Unit 8200 began after a November 2021 meeting in Seattle between Microsoft CEO Satya Nadella and then-Unit 8200 commander Yossi Sariel.
Internal Microsoft documents showed Sariel sought to store up to 70% of the unit's intelligence data on Azure servers.
This marks the first known instance of a major U.S. technology company revoking the Israeli military's access to its products since the Gaza war began. The decision came amid growing pressure from Microsoft employees and investors over the company's military contracts with Israel.
Protests erupted at Microsoft's U.S. headquarters and European data centers following the investigation's publication. The worker-led campaign group No Azure for Apartheid demanded the company end all ties with the Israeli military.
Microsoft launched an "urgent" external inquiry after the reporting emerged, finding evidence that supported elements of the investigation, including information about Azure storage consumption in the Netherlands and AI service usage.
Although Microsoft has terminated Unit 8200's specific services, it maintains relationships with other Israeli military units. A January investigation revealed the company has "a footprint in all major military infrastructures in Israel," with dozens of army units relying on Microsoft's cloud services.
The Gaza offensive has killed more than 65,000 Palestinians, mostly civilians, according to local health authorities, and created what humanitarian organizations describe as a starvation crisis.
A United Nations commission recently concluded Israel had committed genocide in Gaza, a charge Israel denies.
Before the Azure partnership, Unit 8200's internal servers could only store recordings from tens of thousands of Palestinians the military designated as "suspects." The Azure platform's expanded capacity enabled surveillance of virtually any Palestinian in the occupied territories, sources said.
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