Microsoft caught in the cloud: Israeli spy unit’s use of Azure under fire

Widespread pressure from protesting employees, human rights organizations, and various media outlets has forced Microsoft to initiate an investigation into reports that the Israeli regime has been spying on Palestinians using the company’s technologies.

A joint report by The Guardian, +972 Magazine, and the Hebrew-language outlet Local Call previously revealed that millions of Palestinian phone calls in Gaza and the West Bank had been stored on Microsoft’s Azure cloud platform by Israel’s Unit 8200.

According to The Guardian, Microsoft issued a statement declaring that the use of its cloud technology for storing millions of intercepted calls violated its terms of service, and announced the launch of an immediate investigation into reports that Israel’s military surveillance agency (Unit 8200) had used its technology to facilitate mass monitoring of Palestinians.

Microsoft stated that this formal review is in response to reports showing how Israel’s Unit 8200 relied on Microsoft’s Azure cloud platform to store vast collections of Palestinians’ everyday mobile phone calls.

The investigation, to be carried out by the U.S. law firm Covington & Burling, marks the second external review Microsoft has initiated regarding the Israeli military’s use of its technology.

The first review was launched earlier this year amid internal opposition and various reports about Israel’s reliance on Microsoft technology during its assault on Gaza.

When releasing the findings of that review in May, Microsoft claimed that it had found no evidence of the Israeli military violating its terms of service or using Azure to target or harm people in Gaza.

However, a series of subsequent reports raised concerns among Microsoft’s senior leadership that some employees based in the occupied territories may have withheld information about how Unit 8200 was using Azure during interviews conducted as part of the review.

In its statement released on Friday, August 16, 2025, Microsoft said the new investigation will expand on the previous one.

The company is also facing pressure from the employee-led campaign “No Azure for Apartheid,” which has accused Microsoft of “complicity in genocide and apartheid” and has demanded that the company cut all ties with the Israeli military and publicly disclose them.

The “No Azure for Apartheid” campaign criticized Microsoft’s decision to launch another investigation, describing it as yet another delaying tactic to avoid meeting its demands.

According to sources familiar with Microsoft’s internal discussions, senior executives in recent days have considered the troubling possibility that Unit 8200—a highly sensitive and important client—may have violated the company’s terms of service and its human rights commitments.

Leaked files show that since late 2021, Microsoft has been aware of Unit 8200’s plans to transfer a massive amount of sensitive and classified intelligence data to Azure. In November that year, at Microsoft headquarters, senior executives—including the CEO—attended a meeting in which the commander of Unit 8200 discussed plans to migrate up to 70 percent of its data to the cloud platform.

The company has claimed that its executives were not aware that Unit 8200 intended to use Azure for storing intercepted Palestinian phone calls—or that it eventually did so.

While a Microsoft spokesperson claimed last week that the company has no knowledge of the data stored in its customers’ cloud environments, an Israeli military spokesperson had previously asserted that its cooperation with companies like Microsoft is conducted under formal agreements, with legal oversight, and in compliance with international law.