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Series of Genocide Companies: Part Two – Microsoft

Explore Microsoft's controversial role in Israel, from technological innovation to military collaboration. This investigative report delves into Microsoft’s facilities, acquisitions, economic impact, and ties with Israeli defense forces post-October 7, 2023, raising ethical questions about dual-use technologies in the Israeli-Palestinian conflict.

REPORT

Refaat Ibrahim

7/5/202513 min read

Microsoft in Israel
Microsoft in Israel

Introduction

Microsoft is among the most prominent global technology companies that have established a strong and influential presence in Israel, reflecting the country’s strategic importance as a global hub for technological innovation. After opening its local branch in 1989, Microsoft established its first research and development center outside the United States in Israel in 1991. Today, it operates three branches as part of "Microsoft Israel."

Microsoft has become a key player in Israel’s technological landscape. Steve Ballmer, the company’s former CEO, described Microsoft as “as much an Israeli company as it is an American one,” highlighting the deep relationship between the company and Israel.


This report aims to provide a comprehensive analysis of Microsoft’s presence in Israel, focusing on its facilities and capabilities, investments and acquisitions, economic impact, and collaboration with Israeli military and intelligence institutions, particularly following the October 7, 2023 attack. The report also addresses the controversy surrounding the use of Microsoft’s dual-use technologies in the context of the Israeli-Palestinian conflict while maintaining objectivity in presenting facts and conflicting statements.

Part One: Microsoft’s Capabilities and Facilities in Israel


Spread of Offices and Research and Development Centers

  • Microsoft maintains offices and development centers in major Israeli cities, including Herzliya, Tel Aviv, Haifa, and Nazareth.

  • The Microsoft Israel Development Center (ILDC) serves as a strategic global hub for developing products with worldwide impact.

Areas of Focus

  • Microsoft’s centers in Israel focus on developing advanced technologies in cybersecurity, artificial intelligence, business intelligence, big data, and healthcare.

  • Cybersecurity and artificial intelligence sectors have experienced growth exceeding 75% under the leadership of Michal Braverman-Blumenstyk, vice president of the company and director of the research and development center.

  • Activities also include sales and marketing to strengthen the company’s commercial presence in local and regional markets.


Flagship Products

  • The research and development centers have launched cybersecurity products such as Sentinel and Defender for Cloud.

  • These centers leverage Israel’s unique technological assets and entrepreneurial spirit to support Microsoft’s global vision.


Part Two: Microsoft’s Investments and Acquisitions in Israel

Strategic Acquisitions

  • In 2017, Microsoft acquired Hexadite, a cybersecurity company specializing in automated systems for responding to cyberattacks, for $100 million.

  • In 2006, Microsoft acquired Gteko for $110 million, a company focused on networking and support software for the digital home.

  • In 2022, Microsoft acquired Oribi, a web analytics company founded by Iris Shoor, who previously served in Israeli intelligence.

  • Microsoft has acquired 17 other companies for billions of dollars, often founded by former Israeli military officers specializing in cybersecurity and surveillance.


Relationship with Military Institutions

  • The acquisitions demonstrate a strategic pattern of integrating Israeli security and military expertise into Microsoft’s global framework.

  • Many of the acquired companies were founded by former officers from units like Unit 8200, enhancing Microsoft’s capabilities in cybersecurity and dual-use artificial intelligence.


Controversy Surrounding Dual-Use Technologies

  • The acquisitions raise questions about the boundary between civilian and military technology, particularly in the context of the Israeli-Palestinian conflict.

  • Revenues from these deals contribute to strengthening Israel’s military-industrial financial infrastructure.

  • They raise human rights concerns regarding “digital repression” or “digital apartheid.”

Microsoft in Israel
Microsoft in Israel

Part Three: Microsoft’s Economic Impact in Israel

Contribution of the High-Tech Sector

  • The high-tech sector accounts for 20% of Israel’s GDP, compared to 9% in the United States and 6% in the European Union.

  • The sector contributes over 53% of Israel’s exports.

  • In 2024, the sector grew by 2.2%, while the rest of the economy contracted by 1.5%.


Microsoft’s Role in the Economy

  • Microsoft’s acquisitions generate significant tax revenues for Israel, bolstering the military-industrial infrastructure.

  • Microsoft’s operations grew by 10% in 2024, making it a “safe haven” for technological investment.

  • The company contributes to creating a “shock-resistant economy” in the technology sector.


Human Rights Controversy

  • Microsoft, alongside companies like Alphabet and Amazon, is accused of enabling Israel’s mass surveillance systems.

  • United Nations reports indicate that these companies grant Israel “quasi-governmental access” to their technologies, enhancing surveillance and targeting capabilities.

Part Four: Microsoft’s Collaboration with the Israeli Military and Intelligence Units


Microsoft’s presence in Israel reveals a complex and intertwined relationship with Israeli defense and intelligence institutions, extending beyond traditional commercial ties.

Cloud Computing and Artificial Intelligence Services


Microsoft has acknowledged selling advanced artificial intelligence and cloud computing services to the Israeli military. These services are critical for automating Israeli military operations. The Israeli military uses the Azure platform to transcribe, translate, and process intelligence gathered through mass surveillance, which can then be linked to Israel’s AI-based targeting systems.

A senior Israeli military officer described cloud technology as “a weapon in every sense of the word.” This collaboration dates back to at least 2002, when Microsoft contracted to provide software products and unlimited implementation services to the Israeli military, Ministry of Defense, and other security forces for three years at a cost of $100 million.

Collaboration with Intelligence Units

Microsoft has a “footprint in all major military infrastructures” in Israel, including service agreements with units such as Mamram (the military’s central computing unit), Unit 8200, and Unit 81 (military intelligence units developing espionage technologies). Unit 8200, the largest unit in the Israeli Defense Forces, focuses on signals intelligence (SIGINT), code decryption, counterintelligence, cyber warfare, military intelligence, and surveillance.


Reports indicate that Microsoft integrates its employees into Israeli military units to work on highly sensitive and classified projects, such as a “surveillance system used to monitor Palestinians,” working closely with the Military Intelligence Directorate, including the elite surveillance unit, Unit 8200.

Microsoft engineers provide support to Israeli military intelligence units like Unit 8200 and Unit 9900 (which collects and analyzes visual intelligence) to facilitate their use of cloud infrastructure. Between October 2023 and June 2024 alone, the Israeli military spent $10 million to purchase 19,000 hours of engineering support from Microsoft.

Hiring Former Soldiers and Officers

Microsoft employs over 1,000 former Israeli soldiers and officers in its offices within the occupied territories, with many also working in its global branches. Investigations based on leaked employee records reveal that more than 300 former Israeli intelligence operatives currently work at Microsoft. The Microsoft team dedicated to servicing the Israeli military account includes a senior executive who served 14 years in Unit 8200 and a former head of information technology in military intelligence.


Microsoft’s hiring of large numbers of former Israeli intelligence soldiers and officers, particularly from Unit 8200, suggests an organized, informal “recruitment pipeline” linking the Israeli military/intelligence establishment with Microsoft. This enhances the company’s ability to access specialized security and military expertise.

Unit 8200, known as a hub for technical talent, serves as a primary source of personnel for Microsoft. This enables Microsoft to better understand and meet the needs of Israeli government and military clients, potentially contributing to the development of defense and intelligence-related technologies.

This pattern raises serious questions about the purported neutrality of multinational technology companies and highlights the overlap between the private sector and state security institutions. It may also be seen as indirectly enhancing Israel’s military and intelligence capabilities, raising human rights concerns, especially when this expertise and these technologies are used in conflict or civilian surveillance contexts.

Training Programs and Military Projects


Microsoft participates in several training programs and projects in collaboration with the Israeli military. In April 2024, Microsoft Israel hosted a group from the “Combatants to Hi-Tech” program, in collaboration with the Israeli Ministry of Defense and the Israeli military, for a TypeScript workshop and tour.

In December 2022, Microsoft Israel launched a free cybersecurity training program for Israeli military veterans in collaboration with the military. Microsoft also collaborated with the Israeli military on the “Hadarim” project, which offers high school female students the opportunity to join a prestigious pre-military service program aimed at integrating them into the military’s high-tech units.

Regarding specific military applications, the OneSim program, a new military simulation software by Elbit Systems used in advanced Israeli military training centers to simulate “real battle scenarios” for tank crews, operates on the Microsoft Azure platform.

Azure also hosts the “Al Munaseq” application developed by the Israeli Ministry of Defense, used to manage apartheid permits for Palestinians in the occupied West Bank and Gaza. Additionally, Microsoft provided cloud infrastructure for Palantir, described as the “21st-century AI weapons dealer,” whose AI platform, used by the Israeli military, is powered by vast amounts of data collected on Palestinians and partially hosted on Microsoft servers.


Part Five: Microsoft’s Support for Israel Post-October 7, 2023

The relationship between Microsoft and the Israeli military establishment saw a significant escalation in support and collaboration following the October 7, 2023 attack.

Significant Increase in Use of AI and Cloud Computing Services


Microsoft acknowledged selling advanced artificial intelligence and cloud computing services to the Israeli military during the Gaza war and assisting in efforts to locate Israeli hostages. An Associated Press investigation revealed previously undisclosed details about the close partnership between Microsoft and the Israeli Ministry of Defense, with the military’s use of commercial AI increasing by approximately 200 times after the October 7, 2023 attack.

The volume of data stored by the Israeli military on Microsoft servers doubled between March 2023 and July 2024 to over 13.6 petabytes, equivalent to roughly 350 times the digital memory needed to store every book in the Library of Congress. The Israeli military’s use of Microsoft’s massive server banks increased by about two-thirds in the first two months of the war alone.

A contract worth $133 million was signed between Microsoft and the Israeli Ministry of Defense. Additionally, the Israeli military spent $10 million to purchase 19,000 hours of engineering support from Microsoft between October 2023 and June 2024.

Support and Assistance in Hostage Rescue Efforts


Microsoft provided “special access to its technologies beyond the terms of its commercial agreements” and “limited emergency support” to Israel as part of efforts to assist in hostage rescue. Microsoft confirmed that this support was provided “with significant oversight and on a limited basis, including approving some requests and rejecting others.”

Controversy and Criticism


Microsoft faced widespread protests from its employees and human rights organizations, such as the “No Azure for Apartheid” group, which accused the company of complicity in the “genocide” in Gaza. Employees who publicly protested Microsoft’s contracts with the Israeli military were fired, sparking further controversy.

Human rights organizations criticized the use of AI systems in targeting decisions, noting that they may be flawed and lead to innocent deaths. Critics described Microsoft’s statement as a “public relations stunt to whitewash its image.”

Microsoft’s conflicting statements about “no evidence of harm to civilians” versus “lack of visibility into how clients use its software” highlight a profound ethical and legal challenge in the realm of military technology.

This contradiction underscores a “responsibility gap” in the advanced technology environment, where companies provide powerful, transformative tools but attempt to evade responsibility for their end-use by clients, particularly in conflict contexts.

This poses a significant challenge to ethical and legal accountability and may be seen as an attempt to whitewash the issue without addressing its core. This case highlights the urgent need for stricter international governance frameworks for AI, especially in military applications. If companies cannot fully track the use of their technologies, how can they ensure compliance with human rights or the laws of war? This could set a dangerous precedent.

Microsoft in Israel
Microsoft in Israel

Part Six: Research and Development and Artificial Intelligence in Support of Defense Capabilities

Role of Research and Development Centers

  • The ILDC leads the development of cybersecurity and artificial intelligence technologies, with a 75% growth under Michal Braverman-Blumenstyk’s leadership.

  • It launched products like Sentinel and Defender for Cloud, focusing on innovative healthcare and cybersecurity solutions.

  • The center participates in events like BlueHat IL and hackathons to address cybersecurity threats.


Military Applications

  • Microsoft’s technologies are used to process intelligence information and support AI-based targeting systems.

  • AI usage increased 200-fold after October 7, 2023, reflecting its role in data analysis and target identification.

  • AI is used to analyze intercepted communications and surveillance data to identify suspicious patterns.


Academic and Military Collaboration

  • The chief scientist participates in conferences on integrating information technologies into the military.

  • The Liftoff program supports 10 startups annually, focusing on defense projects.


Statements by Officials

  • Bill Gates described Israel as a “technological powerhouse” in 2005, with an agreement to support startups.

  • Ehud Olmert highlighted the importance of Microsoft’s collaboration in advancing innovation.

  • A senior Israeli military officer described cloud technology as “a weapon in every sense of the word.”

  • Avi Hasson noted that high-tech accounts for 20% of GDP and over 53% of exports.


Is Microsoft a Civilian Technology Company or a Subsidiary of the Israeli Military?

The close relationship between Microsoft and Israeli military and intelligence institutions raises controversial questions about the nature of the company’s role: Is it truly a global technology company seeking to advance civilian innovation, or has it become a de facto subsidiary supporting Israel’s military capabilities directly and indirectly?

The extensive collaboration with the Israeli military, including the provision of Azure cloud computing services and AI for surveillance and targeting purposes, suggests that Microsoft is more than just a commercial player in the Israeli market. For instance, the integration of Microsoft engineers into sensitive projects with units like Unit 8200 and the employment of over 1,000 former Israeli soldiers and officers reinforce the notion that Microsoft plays a role that transcends traditional commercial objectives.

This intersection between civilian and military technology raises questions about the company’s independence from Israel’s military agenda, particularly given its acquisitions of startups founded by former military officers, reflecting a strategic pattern of integrating military expertise into its global structure.


Ethical Impact and Compliance with Laws

Microsoft publicly commits to a code of conduct for AI and an acceptable use policy that prohibits the use of its technologies to harm civilians unlawfully. However, the company’s admission of limited visibility into how clients, such as the Israeli military, use its technologies on their own servers raises serious questions about the effectiveness of these policies.

In the context of the Gaza war, which has resulted in over 188,000 deaths and injuries according to estimates, this responsibility gap highlights a profound ethical and legal challenge. Despite Microsoft’s denial of evidence that its technologies are used to harm civilians, its inability to track end-use undermines its claims of ethical commitment.

Human rights organizations, such as the “No Azure for Apartheid” group, have described the company’s statements as an attempt to whitewash its image without addressing the core issue, particularly amid accusations of complicity in human rights violations through support for surveillance and targeting systems.


Bias in the Israeli-Palestinian Conflict

Microsoft’s emergency support for Israel following the October 7, 2023 attack, including its assistance in locating Israeli hostages, demonstrates a clear bias toward one side in the decades-long Israeli-Palestinian conflict. While the company justifies this support as part of limited humanitarian efforts, its apparent disregard for the massive human toll in Gaza, where its technologies are used in mass surveillance and AI-based targeting operations, raises questions about its ethical principles.

This perceived bias contradicts the company’s image as a neutral global entity seeking to advance technology for humanity’s benefit. While Microsoft provides its services to the Israeli military with special access beyond commercial agreements, it does not demonstrate the same level of transparency or support in addressing the devastating impact of its technologies on Palestinians, reinforcing the impression that it prioritizes political and economic alliances over ethical principles.


The Need for Stricter Ethical Governance

The controversy surrounding Microsoft’s role in Israel exposes a significant gap in the ethical accountability of multinational technology companies. As the use of AI and cloud computing in military contexts grows, there is an urgent need for robust international governance frameworks to ensure these technologies are not used to violate human rights or the laws of war.

Microsoft’s admission that it cannot fully track the use of its technologies highlights a broader challenge facing the tech industry: How can companies provide powerful, dual-use tools without bearing responsibility for their consequences? This question demands a reevaluation of technology companies’ policies, including Microsoft’s, to ensure that their ethical commitments are not mere slogans but translate into tangible actions that protect human rights in conflict contexts.

Sources used in the report



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