The Israeli Military Is One of Microsoft's Top AI Customers, Leaked Documents Reveal

Photo by J. David Ake/Getty Images

Microsoft is a major provider of cloud services and artificial intelligence for the Israeli military, according to internal documents related to the contracts between the Israeli Ministry of Defense (MoD) and Microsoft Israel obtained by Drop Site News. The leaked documents show that Israel’s usage spiked dramatically in the months following October 7, 2023 when Israel was using AI and other technology to wage its brutal war on Gaza.

The trove of documents reveals that Microsoft’s ties to the Israeli military are deeper and more lucrative than previously known, exposing the tech giant’s role in supplying advanced cloud and AI services during the war that multiple international bodies, including the International Court of Justice, ruled may plausibly constitute a genocide. Drop Site shared the documents with independent Israeli-Palestinian investigative magazine +972, which previously exposed Israel’s use of AI in its bombing campaign, Local Call, and The Guardian, which also published stories Thursday.

Microsoft’s dealings with the Israeli military are part of a pattern among American technology giants rushing to supply it with cloud and AI technologies to secure a share of Israel’s ever-growing war chest since October 2023. According to the documents, Microsoft drastically expanded its relationship with the Israeli military since the war on Gaza began and became a major provider of cloud services to various Israeli military units.

In total, the costs just for engineering support and consultancy with the Israeli military have amounted to approximately $10 million since the start of the October 2023 Gaza offensive, with additional support projects worth another $30 million under consideration in 2024. The total size of Israeli MoD’s contract with Microsoft, including the usage of the Azure platform, is much larger, but the exact figure could not be ascertained from the documents.

The Israeli military has been leveraging a range of Microsoft cloud services to support their ongoing operations, according to the documents. Microsoft Azure is a cloud computing platform that provides a suite of applications and services to its enterprise customers. Its most important components have historically been compute and storage, which allow Microsoft customers to process and store massive amounts of data in cloud servers hosted globally. More recently, due to Microsoft’s investment of billions of dollars in OpenAI, the same company that runs ChatGPT, Microsoft has added OpenAI’s Large Language Models to its Azure suite of offerings.

Bundled together, these services are what form the core of the services the Israeli military has purchased from Microsoft. Among their most used services are translation and the Azure OpenAl service, an enterprise service based on the same technology as ChatGPT, together accounting for almost 75 percent of the total usage. Speech and voice services make up the rest.

Leaked data show a dramatic spike in Microsoft cloud storage used by the Israeli military, jumping more than 155 percent between June 2023 and April 2024, and peaking just before the Rafah offensive in May 2024. Storage use is an important indicator showing the extent of AI usage, since storage usually grows along with the usage of other cloud products.

Artificial intelligence took on a new role in Israel’s war on Gaza, with the Israeli military using a program called Lavender to identify targets, according to reporting from +972—though it is not known exactly which companies fueled this particular program and the military ramped down that program in subsequent months. Their report in August also revealed that Microsoft Azure and Amazon AWS were competing for lucrative Israeli military contracts.

The conflict in Gaza spurred a "gold rush" among tech companies seeking to provide services to the Israeli military. In the weeks following the October 7th attack, Google escalated its efforts to provide Israel’s Defense Ministry with increased access to its AI technology. This urgency was driven by a concern that the military would turn to Google's competitor, Amazon, which also has a contract with the Israeli government. The new set of documents show that Microsoft was similarly enthusiastic about Israeli contracts and gave major discounts for the opportunity.

Since the beginning of the war on Gaza, Israel has emerged as one of Microsoft’s top 500 global customers, with the Israeli MoD serving as an umbrella customer of Microsoft, overseeing the Israeli military’s overall relationship with the company. But unlike a traditional centralized procurement model, where a single organization makes purchasing decisions on behalf of the entire entity, the Israeli military’s structure is more decentralized. What sets the Israeli military apart from other umbrella accounts is that various departments and entities within the Israeli military operate with a significant degree of autonomy and can independently sign contracts based on their internal budgets.

The documents also reveal the breadth of Microsoft’s dealings with the Israeli military; several units within the Israeli military independently contracted Microsoft services, including Unit 8200, an elite intelligence unit specializing in signal intelligence, cyberwarfare, code decryption, and military surveillance; Matzov, the Center of Encryption and Information Security; Mamram, the central computing system unit; Tikshuv, the Computer and IT Directorate overseeing communications and cybersecurity; and Lotem, the unit for Telecommunications and Information Technology. The Israeli Air Force and Navy also made significant deals with Microsoft immediately after the start of the October 2023 Gaza offensive.

The Microsoft data centers providing services to the Israeli military were not limited to Israel, with many being hosted in European countries that recognize the International Court of Justice’s jurisdiction as compulsory. If the court ultimately rules the war a genocide, hosting Microsoft’s data servers utilized by the Israeli military may constitute a breach of international law and could cause legal issues related to Microsoft’s operations in those jurisdictions.

Internally, Microsoft employees had already been petitioning their employer to scrutinize their policies relating to Israel. Drop Site had reported in September last year that Microsoft was criticized for its sponsorship of the "I Love Mamram" conference celebrating the 65th anniversary of Mamram, the Israeli military's Center of Computing and Information Systems unit, where Microsoft Israel’s CEO was slated to speak. The documents now reveal that Mamram was a Microsoft customer. The company has also faced criticism for matching employee donations to organizations that support the Israeli military, while not matching donations to organizations that support Palestinians, and even delisting organizations like UNRWA, the UN agency for Palestinian refugees.