Microsoft Blocks Israeli Intelligence Unit 8200 From Cloud Services Following Mass Surveillance Reports

In a dramatic and unprecedented move, Microsoft has notified Israel that it is terminating access for the elite military intelligence Unit 8200 to the company’s crucial cloud and artificial intelligence (AI) services. This decision, made late last week, follows a damning investigative report that exposed a vast surveillance project utilizing Microsoft technology to intercept and analyze the private communications of Palestinians.

The intelligence unit was reportedly using Microsoft’s Azure cloud platform to store and analyze contents from millions of cellular conversations belonging to the Palestinian population in Gaza and the West Bank, as part of a project internally nicknamed “A Million Calls Per Hour.” This operation, uncovered by an investigation published by The Guardian, Local Call, and +972 Magazine, relied on Azure's massive computing power and storage to develop a system capable of intercepting, recording, and running analytics on enormous volumes of private communication data.

The surveillance project was allegedly developed after a 2021 meeting between Microsoft CEO Satya Nadella and the then-commander of Unit 8200, Brigadier General Yossi Sariel. The highly sensitive data, estimated to be around 8,000 terabytes of recorded calls, was stored in a Microsoft data center in the Netherlands. Following the initial August publication of the investigation, the unit reportedly moved the data elsewhere, likely to Amazon Web Services (AWS).

Microsoft initiated an urgent external review of its cooperation with the Israeli defense establishment. The company’s President and Vice Chair, Brad Smith, confirmed the decision in an internal email to employees, stating that the interim findings of the review led to the access termination. Smith affirmed the company’s long-standing ethical position: "We do not provide technology that enables the mass surveillance of citizens. We have applied this principle consistently in every country for more than two decades."

Smith’s public statement outlined the basis for the action, explaining that the company’s standard terms of service prohibit using its technology for mass surveillance. He added, "We found evidence that supports parts of The Guardian's report," specifically concerning the consumption of Azure storage capacity in the Netherlands and the use of certain AI services. Consequently, Microsoft notified the Israeli Ministry of Defense that it was "discontinuing and disabling specific Ministry of Defense subscriptions and services, including the use of cloud storage and certain artificial intelligence services and technologies."

While this decision does not sever all business ties, Microsoft will continue to collaborate with the Ministry of Defense on other services, particularly cyber security, it marks the first known instance of a major American tech firm cutting off a critical service to the Israeli security apparatus due to human rights concerns.

Israeli defense officials downplayed the significance of the move, stating, "Microsoft’s step does not lead to an operational blow. We assumed this was the direction and that Microsoft was preparing for such a move, and therefore we prepared in advance with a backup capability." They stressed: "There is no damage to the operational capability of 8200."

The controversial move by Microsoft comes amidst sustained pressure from employees and investors, including a group called “No Azure for Apartheid,” who have organized protests and demanded an end to the company’s involvement in Israeli defense operations. The incident raises serious questions within the Israeli defense establishment regarding the reliability of relying on foreign cloud platforms for storing highly sensitive security information.