US technology giant Microsoft on Thursday, September 25, suspended specific cloud and artificial intelligence services provided to a unit within the Israel Ministry of Defense (IMOD), following an internal investigation into alleged misuse tied to the surveillance of Palestinian civilians.

The decision comes in response to reporting by The Guardian on August 6, which claimed that the Israel Defense Forces (IDF) were using Microsoft’s Azure cloud platform to store data collected through mass surveillance in Gaza and the West Bank.

In a company-wide message, Microsoft vice chair and president Brad Smith confirmed the action and outlined the principles behind the move.

“We do not provide technology to facilitate mass surveillance of civilians,” Smith said, reaffirming Microsoft’s long-standing commitment to privacy and responsible AI use. “This is a principle we apply globally.”

Microsoft initiated a formal review on August 15 after The Guardian’s report raised questions about the possible misuse of its services. The review was conducted in line with Microsoft’s contractual policies and ethical standards. It focused on internal business records rather than customer data, in order to maintain strict privacy commitments.

Evidence uncovered during the process indicated that certain services — including Azure storage in the Netherlands and AI technologies — were being used in a manner consistent with elements of the reported claims.

Services suspended to uphold company policy

As a result, Microsoft has now disabled specific IMOD subscriptions, including cloud storage and AI capabilities. The company stated that these actions were taken to ensure compliance with its terms of service and ethical standards.

The suspension does not affect Microsoft’s broader cybersecurity support for Israel or regional partners under the Abraham Accords, which remain separate from this decision.

“We are a company guided by principles,” Smith stated. “Our decisions reflect our values, especially when it comes to human rights and trust.”

Acknowledgement of journalism’s role

Smith also credited The Guardian’s investigation for playing a key role in initiating the review, noting that external reporting helped surface information Microsoft could not access due to customer confidentiality rules.

He confirmed the review is still ongoing and promised further updates in the coming weeks, including any organisational lessons that may emerge.

In late August, Microsoft terminated four employees who participated in protests on company premises against its ties to Israel amid the ongoing war in Gaza.

The company stated the dismissals followed serious breaches of company policies and that the on-site demonstrations had “created significant safety concerns.”

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