Microsoft has removed the General Manager of its Israeli subsidiary and several other senior staff members after an internal investigation found that the Israeli military violated the company’s terms of service by using Azure cloud infrastructure to conduct mass surveillance of Palestinians.
The investigation also found that Microsoft Israel’s leadership had not been fully transparent with the company’s global headquarters about how the Israeli Defense Ministry was using its systems.
Alon Haimovich, who had served as general manager of Microsoft Israel for four years, will be leaving the company at the end of May, alongside several other senior staff. In an internal email announcing his departure, Haimovich said he had helped transform Israel into “one of Microsoft’s fastest-growing markets worldwide.”
What the Investigation Found
This investigation was a joint one between The Guardian, Israeli-Palestinian publication +972 Magazine, and Hebrew-language outlet Local Call that drew on internal Microsoft documents and interviews with anonymous sources from the company and Israeli military intelligence.
Carried out in August 2025, the investigation alleged that Unit 8200, Israel’s military intelligence agency, had used Microsoft’s Azure platform to store hours of Palestinian phone call recordings from Gaza and the West Bank. The data was reportedly used to inform airstrike targeting, detentions, and other military operations.
According to The Guardian, Unit 8200 was given access to a customised and segregated area within Azure.
The investigation revealed not only usage patterns that Microsoft claims violate its terms, but also conduct that was not transparent towards global management, ultimately leading to a damage in trust in the Israeli branch’s leadership.
And in September 2025, as a response to the investigation, Microsoft announced that it had ceased and disabled specific Israeli military subscriptions and services, including their use of specific cloud storage and artificial intelligence (AI) services and technologies, as a result of its review of the allegations.
What Comes After Leadership Exit
Despite the leadership removals, Microsoft is reportedly pursuing renewal of its contract with the Israeli Ministry of Defence when it expires later in the year. Many reports indicate the ministry is still interested in continuing the relationship, although at a reduced scale and primarily for desktop applications such as Office and Windows.
How Microsoft structures any renewed Ministry of Defence arrangement going forward, and what public transparency it provides about the scope of that agreement, will be closely watched by investors, regulators, and civil liberties organisations.
The 2023 Covington and Burling probe has already raised a broader question that the wider tech industry will always have to answer concerning misuse of a tech product – when a cloud customer uses infrastructure in ways that violate terms of service, and internal staff knew about it, where does corporate accountability begin and end?
For cloud companies with government and military clients, the answer to that question may soon find its way into the contracts they hold.
