Why has Microsoft cut Israel off from some of its services?

Microsoft has announced that it has withdrawn some of its services from the Israeli army, following an investigation that raised concerns that Israel may be violating the company’s terms of service by using its artificial intelligence (AI) and cloud services to spy on millions of Palestinians throughout Gaza and the West Bank.

The decision on Thursday followed a joint investigation by the United Kingdom’s Guardian newspaper and Israeli publications +972 Magazine and Local Call, which revealed in August that the Israeli army was using Microsoft’s Azure cloud platform to conduct mass surveillance of Palestinians amid Israel’s brutal onslaught on Gaza, which has killed more than 65,000 people in less than two years.
Microsoft has, in recent months, fired or reported several employees to the police over protests about the use of its software by the Israeli army in Gaza. In August, four employees were fired. Several others have quit the company in protest over Microsoft’s ties to the Israeli army, which they said were enabling the devastation in Gaza.

The tech company consistently denied those claims, but, following the investigation, it announced it had commissioned an external review of its communications on Israel by Washington, DC law firm, Covington & Burling LLP, and another, unnamed technical consulting firm.

Here’s what we know:

What has Microsoft announced about its AI services in Israel?
In a blog post directed to employees on Thursday, Microsoft’s vice chairman and president, Brad Smith, revealed that an external review of the company’s communication records and financial statements had prompted Thursday’s decision, as elements supporting its findings were found to be true. Smith did not detail the specific evidence, but stated that it related to the Israeli army’s use of Azure and Microsoft’s AI services.
“We therefore have informed IMOD of Microsoft’s decision to cease and disable specified IMOD subscriptions and their services, including their use of specific cloud storage and AI services and technologies,” Smith wrote, referring to the Israeli Ministry of Defense.

“We have reviewed this decision with IMOD and the steps we are taking to ensure compliance with our terms of service, focused on ensuring our services are not used for mass surveillance of civilians,” he added.

This marks a major shift in Microsoft’s stance on this issue. In May, following similar findings reported by The Associated Press news agency that the Israeli army’s spy agency, Unit 8200, was using Microsoft services for mass surveillance in Gaza, the company said it had conducted internal reviews of its records.

While it acknowledged that advanced AI and cloud computing services had been sold to the Israeli military to aid in its efforts to locate and rescue Israelis captured by Hamas on October 7, Microsoft said it found no evidence its services were being used to target or harm people in Gaza.