REDMOND, Washington – Microsoft has severed ties with an Israeli military intelligence unit after determining the agency was using its cloud computing platform to power a mass surveillance program targeting Palestinians, the company announced Thursday.

The decision, confirmed by Microsoft Vice Chair and President Brad Smith, follows an investigation by The Guardian newspaper that revealed Unit 8200, an elite Israeli signals intelligence agency, was utilizing Microsoft's Azure cloud to store and process vast volumes of data, including mobile phone call recordings from Palestinian civilians in the occupied West Bank and Gaza.

"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 said in an internal email to staff, seen by news outlets.

According to Smith, Microsoft initiated an immediate review after The Guardian's report was published. The investigation alleged that the unit's use of Azure enabled the storage of enormous datasets, which could be leveraged with artificial intelligence tools to analyze the communications of a civilian population.

As a result of the review, Microsoft informed the Israeli Ministry of Defence of its "decision to cease and disable specified IMOD subscriptions and their services, including their use of specific cloud storage and AI services and technologies."

The move highlights the growing ethical challenges facing major tech companies as their infrastructure becomes integral to government and military operations worldwide. Microsoft's action demonstrates a rare enforcement of its stated policies against mass surveillance, a practice often criticized by human rights groups.

The cutoff, however, is targeted. Smith clarified that the action does not impact Microsoft's separate cybersecurity services contracts with Israel or other governments in the Middle East, indicating a nuanced approach to its business in the region.

The decision comes amid mounting pressure from both Microsoft employees and shareholders, who have expressed growing concern over the company's ties to Israel's military, particularly during its ongoing operations in Gaza. Activist groups hailed Microsoft's move as a significant step.

"When a tech giant like Microsoft draws a line, it sends a powerful message," said a spokesperson for the watchdog group Tech Justice Now. "It acknowledges that there is a clear ethical distinction between defense cybersecurity and facilitating pervasive surveillance of an entire civilian population."

At the time of reporting, the Israeli Ministry of Defence had not issued a public statement in response to Microsoft's action. The Guardian's original investigation suggested the surveillance program collected data on Palestinians without distinction, capturing the private conversations of activists, journalists, and ordinary citizens alike.

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