Microsoft tightens rules for conflict zones after investigation into Israel's military use of Azure
Update – Jun 8, 2026
External investigation results added
Microsoft has wrapped up its investigation into Israel's military use of its Azure cloud and is rolling out new human rights checks. But the report leaves key questions unanswered: the actual contents of the military data were never examined, and staff departures at Microsoft Israel go unmentioned. At the core of the story: cloud infrastructure, mass surveillance, and AI-powered target selection in Gaza.
Microsoft has declared its external investigation into the Israeli military's use of its cloud technology complete. The findings from law firm Covington & Burling match the interim report from September 2025: there was evidence backing parts of the Guardian investigation detailed below, including the Israeli Defense Ministry's use of Azure storage in the Netherlands and its use of AI services.
Microsoft is announcing five areas of action: stricter upfront reviews for deals with security agencies, a review of security clearance oversight in certain non-US markets, regular policy reviews when political conditions shift, and a new anonymous reporting channel called "Trusted Technology Review."
The investigation never looked at what was in the military data
One major gap stands out. Neither Covington nor Microsoft ever looked at the contents of the military data. The entire investigation relied solely on Microsoft's own business records, according to the company. Microsoft says customer privacy required that approach. What exactly was stored on Azure and how it was used operationally - those questions remain unanswered.
In a footnote, Microsoft also acknowledges providing limited emergency assistance beyond the regular business relationship after October 7, 2023, to help with hostage rescue efforts. Some requests were approved, others denied.
What's missing from the summary is just as telling. According to local media reports, the head of Microsoft Israel left the company amid ethics violations, and several other managers followed. The official report says nothing about this. According to the Guardian, the investigation also examined whether Israeli employees felt divided loyalties between Microsoft and the military.
Microsoft tightens rules for conflict zones after investigation into Israel's military use of Azure
Update – Jun 8, 2026
External investigation results added
Microsoft has wrapped up its investigation into Israel's military use of its Azure cloud and is rolling out new human rights checks. But the report leaves key questions unanswered: the actual contents of the military data were never examined, and staff departures at Microsoft Israel go unmentioned. At the core of the story: cloud infrastructure, mass surveillance, and AI-powered target selection in Gaza.
Microsoft has declared its external investigation into the Israeli military's use of its cloud technology complete. The findings from law firm Covington & Burling match the interim report from September 2025: there was evidence backing parts of the Guardian investigation detailed below, including the Israeli Defense Ministry's use of Azure storage in the Netherlands and its use of AI services.
Original article from May 12, 2026:
Microsoft Israel's top executive is out after an internal investigation into the unit's work with Israel's defense ministry. Reporting over the past years points to what's likely at the center of it all: cloud infrastructure, mass surveillance, and AI-powered target selection in Gaza.
Microsoft Israel is losing its country chief Alon Haimovich. According to a Globes report, Haimovich is stepping down as Country General Manager after four years. The move follows an investigation by Microsoft's global leadership into the Israeli subsidiary's work with Israel's defense ministry. Several managers from Microsoft Israel's governance division have also reportedly left the company. For now, Microsoft Israel will be managed directly by Microsoft France.
The issue goes beyond a local management shakeup. According to Globes, Microsoft investigated whether its Israeli unit was sufficiently transparent with headquarters about how the defense ministry was actually using Microsoft systems. The concern is that Israeli military units may have violated Microsoft's terms of use, potentially exposing the company to legal and regulatory risks in Europe. Unlike Google and Amazon, Microsoft is not part of Israel's Nimbus cloud program. Some of the military use reportedly ran through servers on European soil.
Azure apparently became a storage platform for mass surveillance
The most significant thread leads to Unit 8200, Israel's military signals intelligence operation. Last year, a Guardian investigation revealed a system that had reportedly been storing large volumes of Palestinian phone calls from Gaza and the West Bank on Microsoft Azure since 2022. According to the Guardian, Unit 8200 was given access to a "customised and segregated area" within Azure. Microsoft says CEO Satya Nadella was not informed about what kind of data the unit intended to store.
The Guardian reported that the system captured recordings of millions of mobile phone calls per day. The database was designed to let officers store, replay, and analyze conversations over extended periods. Leaked Microsoft documents reportedly referenced 11,500 terabytes of Israeli military data on Azure servers in the Netherlands, with a smaller portion hosted in Ireland. It remained unclear whether the entire dataset was attributable to Unit 8200.
In September 2025, Microsoft took action. Microsoft President Brad Smith wrote that the ongoing review had found evidence supporting parts of the Guardian's reporting. This included information about the Israeli defense ministry's Azure storage usage in the Netherlands and its use of AI services. Microsoft said it had disabled certain cloud storage and AI services for a unit within the Israeli defense ministry.
The database reportedly supported target identification
The Guardian later reported that after the investigation was published, the data appeared to have been moved out of the country. Sources told the Guardian that Unit 8200 had planned a transfer to Amazon Web Services.
What makes this especially significant is the operational use. According to the report, the Azure platform wasn't just used as an archive. Intelligence sources said the stored phone calls were used during the Gaza offensive to prepare airstrikes and identify targets. Azure was reportedly used to aggregate, transcribe, and translate information from mass surveillance. That data could then be cross-referenced with Israeli AI targeting systems.
In May 2025, Microsoft had stated that an internal and external review found no evidence that Azure or Microsoft AI technologies had been used to harm people in Gaza. At the same time, Microsoft confirmed it had provided the Israeli defense ministry with software, professional services, Azure cloud services, and Azure AI services. AP reported that this was the first time Microsoft publicly acknowledged selling advanced AI and cloud services to the Israeli military during the war in Gaza.
Lavender flags people, The Gospel flags buildings
The target selection process described by Israeli-Palestinian media is functionally similar to AI-driven systems like Palantir's Maven, used in the war against Iran, where large datasets are aggregated, evaluated, and translated into operational decisions. In a response to the Business & Human Rights Resource Centre, however, Palantir emphasized that the Israeli systems are independent of its technology and existed before the company's 2024 partnership with Israel's defense ministry was announced.
+972 Magazine and Local Call reported in April 2024 on an AI system called "Lavender." According to six Israeli intelligence officers, Lavender flags suspected members of the military wings of Hamas and Islamic Jihad, including low-ranking individuals. During the first weeks of the war, the military reportedly adopted the system's outputs with minimal scrutiny. At one point, Lavender had flagged up to 37,000 Palestinians as suspected militants and potential targets.
Human review was reportedly minimal in numerous instances. One source said personnel often spent only about "20 seconds" per target, mainly to verify whether the flagged individual was male. The Israeli military disputes the characterization of an automated kill list and told +972 and Local Call that such systems are analytical tools that assist analysts and do not replace human decision-making.
"The Gospel," known in Hebrew as "Habsora," works differently according to the reporting. While Lavender flags people, The Gospel suggests buildings and structures as potential targets. The Guardian described the system in late 2023 as an AI targeting platform that significantly accelerated target generation. +972 and Local Call wrote that the platform produced a large number of potential targets, including the homes of suspected Hamas or Islamic Jihad members.
"Where's Daddy?" reportedly tracked targets to their family homes
A third component, according to +972 and Local Call, is "Where's Daddy?" The system was reportedly used to track individuals flagged by Lavender and alert operators when they returned to their family homes. Those homes were then struck, often at night and while family members were present.
Sources said the military deliberately targeted residential homes because individuals were easier to locate there than during military activity. There were still delays between a "Where's Daddy?" alert and the actual airstrike, the report noted. In some cases, the house was hit even though the target was no longer inside.
AP adds that the Israeli AI systems rate people by probability. Lavender scored individuals on a scale of 0 to 100 based on how likely they were to be militants, according to an intelligence officer who spoke to the wire service. Factors reportedly included family connections, prior detention of relatives, and intercepted phone calls. AP also reported on error risks, including mistranslations and faulty data in individual profiles.
Microsoft faces more pressure than the Nimbus providers
Microsoft's unique position explains the pressure on its Israeli subsidiary. According to Globes, Microsoft is considered more vulnerable among major cloud providers because it never signed a dedicated contract with the Israeli government and defense ministry. Amazon and Google committed to building Israeli data centers as part of the Nimbus program, specifically to keep government and security data outside the reach of foreign regulators.
But even without a Nimbus contract and despite the Unit 8200 scandal, Microsoft remained important to the Israeli defense ministry. Many agreements, including licenses for Office and Windows, continued.
Haimovich's departure, the reported changes in the governance division, and the interim placement of Microsoft Israel under Microsoft France all point to a fundamental breakdown of trust with the local leadership. According to Globes, the core question is exactly this: whether Microsoft Israel was sufficiently transparent with headquarters about how the Israeli defense ministry was using Microsoft systems.
Globes reports that the ministry wants to renew the Microsoft contract at the end of 2026, though at a smaller scale. Defense IT units have already shifted large portions of their cloud infrastructure to Amazon and Google. Microsoft would reportedly be left primarily with simpler applications like desktop software.
Microsoft is announcing five areas of action: stricter upfront reviews for deals with security agencies, a review of security clearance oversight in certain non-US markets, regular policy reviews when political conditions shift, and a new anonymous reporting channel called "Trusted Technology Review."
The investigation never looked at what was in the military data
One major gap stands out. Neither Covington nor Microsoft ever looked at the contents of the military data. The entire investigation relied solely on Microsoft's own business records, according to the company. Microsoft says customer privacy required that approach. What exactly was stored on Azure and how it was used operationally - those questions remain unanswered.
In a footnote, Microsoft also acknowledges providing limited emergency assistance beyond the regular business relationship after October 7, 2023, to help with hostage rescue efforts. Some requests were approved, others denied.
What's missing from the summary is just as telling. According to local media reports, the head of Microsoft Israel left the company amid ethics violations, and several other managers followed. The official report says nothing about this. According to the Guardian, the investigation also examined whether Israeli employees felt divided loyalties between Microsoft and the military.
Original article from May 12, 2026:
Microsoft Israel's top executive is out after an internal investigation into the unit's work with Israel's defense ministry. Reporting over the past years points to what's likely at the center of it all: cloud infrastructure, mass surveillance, and AI-powered target selection in Gaza.
Microsoft Israel is losing its country chief Alon Haimovich. According to a Globes report, Haimovich is stepping down as Country General Manager after four years. The move follows an investigation by Microsoft's global leadership into the Israeli subsidiary's work with Israel's defense ministry. Several managers from Microsoft Israel's governance division have also reportedly left the company. For now, Microsoft Israel will be managed directly by Microsoft France.
The issue goes beyond a local management shakeup. According to Globes, Microsoft investigated whether its Israeli unit was sufficiently transparent with headquarters about how the defense ministry was actually using Microsoft systems. The concern is that Israeli military units may have violated Microsoft's terms of use, potentially exposing the company to legal and regulatory risks in Europe. Unlike Google and Amazon, Microsoft is not part of Israel's Nimbus cloud program. Some of the military use reportedly ran through servers on European soil.
Azure apparently became a storage platform for mass surveillance
The most significant thread leads to Unit 8200, Israel's military signals intelligence operation. Last year, a Guardian investigation revealed a system that had reportedly been storing large volumes of Palestinian phone calls from Gaza and the West Bank on Microsoft Azure since 2022. According to the Guardian, Unit 8200 was given access to a "customised and segregated area" within Azure. Microsoft says CEO Satya Nadella was not informed about what kind of data the unit intended to store.
The Guardian reported that the system captured recordings of millions of mobile phone calls per day. The database was designed to let officers store, replay, and analyze conversations over extended periods. Leaked Microsoft documents reportedly referenced 11,500 terabytes of Israeli military data on Azure servers in the Netherlands, with a smaller portion hosted in Ireland. It remained unclear whether the entire dataset was attributable to Unit 8200.
In September 2025, Microsoft took action. Microsoft President Brad Smith wrote that the ongoing review had found evidence supporting parts of the Guardian's reporting. This included information about the Israeli defense ministry's Azure storage usage in the Netherlands and its use of AI services. Microsoft said it had disabled certain cloud storage and AI services for a unit within the Israeli defense ministry.
The database reportedly supported target identification
The Guardian later reported that after the investigation was published, the data appeared to have been moved out of the country. Sources told the Guardian that Unit 8200 had planned a transfer to Amazon Web Services.
What makes this especially significant is the operational use. According to the report, the Azure platform wasn't just used as an archive. Intelligence sources said the stored phone calls were used during the Gaza offensive to prepare airstrikes and identify targets. Azure was reportedly used to aggregate, transcribe, and translate information from mass surveillance. That data could then be cross-referenced with Israeli AI targeting systems.
In May 2025, Microsoft had stated that an internal and external review found no evidence that Azure or Microsoft AI technologies had been used to harm people in Gaza. At the same time, Microsoft confirmed it had provided the Israeli defense ministry with software, professional services, Azure cloud services, and Azure AI services. AP reported that this was the first time Microsoft publicly acknowledged selling advanced AI and cloud services to the Israeli military during the war in Gaza.
Lavender flags people, The Gospel flags buildings
The target selection process described by Israeli-Palestinian media is functionally similar to AI-driven systems like Palantir's Maven, used in the war against Iran, where large datasets are aggregated, evaluated, and translated into operational decisions. In a response to the Business & Human Rights Resource Centre, however, Palantir emphasized that the Israeli systems are independent of its technology and existed before the company's 2024 partnership with Israel's defense ministry was announced.
+972 Magazine and Local Call reported in April 2024 on an AI system called "Lavender." According to six Israeli intelligence officers, Lavender flags suspected members of the military wings of Hamas and Islamic Jihad, including low-ranking individuals. During the first weeks of the war, the military reportedly adopted the system's outputs with minimal scrutiny. At one point, Lavender had flagged up to 37,000 Palestinians as suspected militants and potential targets.
Human review was reportedly minimal in numerous instances. One source said personnel often spent only about "20 seconds" per target, mainly to verify whether the flagged individual was male. The Israeli military disputes the characterization of an automated kill list and told +972 and Local Call that such systems are analytical tools that assist analysts and do not replace human decision-making.
"The Gospel," known in Hebrew as "Habsora," works differently according to the reporting. While Lavender flags people, The Gospel suggests buildings and structures as potential targets. The Guardian described the system in late 2023 as an AI targeting platform that significantly accelerated target generation. +972 and Local Call wrote that the platform produced a large number of potential targets, including the homes of suspected Hamas or Islamic Jihad members.
"Where's Daddy?" reportedly tracked targets to their family homes
A third component, according to +972 and Local Call, is "Where's Daddy?" The system was reportedly used to track individuals flagged by Lavender and alert operators when they returned to their family homes. Those homes were then struck, often at night and while family members were present.
Sources said the military deliberately targeted residential homes because individuals were easier to locate there than during military activity. There were still delays between a "Where's Daddy?" alert and the actual airstrike, the report noted. In some cases, the house was hit even though the target was no longer inside.
AP adds that the Israeli AI systems rate people by probability. Lavender scored individuals on a scale of 0 to 100 based on how likely they were to be militants, according to an intelligence officer who spoke to the wire service. Factors reportedly included family connections, prior detention of relatives, and intercepted phone calls. AP also reported on error risks, including mistranslations and faulty data in individual profiles.
Microsoft faces more pressure than the Nimbus providers
Microsoft's unique position explains the pressure on its Israeli subsidiary. According to Globes, Microsoft is considered more vulnerable among major cloud providers because it never signed a dedicated contract with the Israeli government and defense ministry. Amazon and Google committed to building Israeli data centers as part of the Nimbus program, specifically to keep government and security data outside the reach of foreign regulators.
But even without a Nimbus contract and despite the Unit 8200 scandal, Microsoft remained important to the Israeli defense ministry. Many agreements, including licenses for Office and Windows, continued.
Haimovich's departure, the reported changes in the governance division, and the interim placement of Microsoft Israel under Microsoft France all point to a fundamental breakdown of trust with the local leadership. According to Globes, the core question is exactly this: whether Microsoft Israel was sufficiently transparent with headquarters about how the Israeli defense ministry was using Microsoft systems.
Globes reports that the ministry wants to renew the Microsoft contract at the end of 2026, though at a smaller scale. Defense IT units have already shifted large portions of their cloud infrastructure to Amazon and Google. Microsoft would reportedly be left primarily with simpler applications like desktop software.