Israel taps Microsoft’s Azure cloud to process up to one million Palestinian calls per hour in a sweeping surveillance operation.

Israel taps Microsoft’s Azure cloud to process up to one million Palestinian calls per hour in a sweeping surveillance operation

One afternoon in late 2021, Satya Nadella, chief executive of Microsoft, traveled to the company’s sprawling Redmond campus to meet with Yossi Sariel, head of Israel’s signals-intelligence unit, Unit 8200. In the modernized former poultry farm that serves as Microsoft’s headquarters, Sariel laid out a proposal: to allocate a dedicated, highly secured enclave within Microsoft’s Azure cloud for his unit’s classified workloads. With Azure’s practically limitless capacity, Unit 8200 would be able to ingest and retain enormous volumes of intercepted communications—specifically, audio recordings of phone calls placed by Palestinians in the Gaza Strip and the West Bank.

Although Microsoft has consistently maintained that Nadella was only informed he would be hosting “sensitive workloads,” and not the precise nature of the data, a trove of internal Microsoft documents plus interviews with eleven people—comprising current and former Microsoft staff and members of Unit 8200—paints a different picture. By early 2022, the cloud-based archive was active, streaming raw audio files from Palestinian telecom infrastructure into Microsoft data centers in the Netherlands and Ireland. According to three insiders from Unit 8200, the system rapidly became integral to the unit’s operational planning: analysts replayed call recordings to support the selection and timing of airstrikes and other military actions in the occupied territories.

Israel’s security services have long tapped into Palestinian telephone networks for intelligence, but previously they targeted specific individuals or groups. This new, cloud-powered architecture, by contrast, scooped up millions of civilian calls indiscriminately—no prior warrant or target designation required—enabling analysts to access conversations of virtually any Palestinian making a call to another Palestinian or to numbers in Israel and beyond.

Faced with an ever-growing swell of intercepted traffic and lacking the storage and processing capabilities on its own military servers, Unit 8200’s leadership turned to Microsoft. There emerged an internal slogan—“one million calls an hour”—that captured the scale of what they aimed to achieve. Microsoft engineers, working under strict confidentiality protocols and in close consultation with Israeli security teams, erected layers of enhanced encryption and access controls around the unit’s slice of Azure, ensuring that most Microsoft employees—even many on the Azure team—remained unaware that Unit 8200 was their customer.

Leaked project documents reveal that by July 2024, the archive had ballooned to more than 11,500 terabytes of data, roughly equivalent to 200 million hours of audio. While some portion may belong to other military branches, Unit 8200 files indicate its own share comprises the lion’s share of those hundreds of millions of hours.

These disclosures arrive amid growing dissent within Microsoft over its involvement with Israel’s military. In May 2024, an employee stormed the stage during Nadella’s keynote, demanding accountability for how Azure was “fueling war crimes.” Following earlier reporting on Microsoft’s technology being used in Gaza, Redmond commissioned an external review, which—Microsoft says—found no proof that Azure or its AI offerings directly targeted civilians or facilitated lethal operations.

Microsoft insists that its engagement with Unit 8200 was confined to bolstering cybersecurity—protecting Israeli networks from cyberattacks by terrorist groups or rival states—and that it was never apprised of a plan to archive ordinary civilians’ phone calls. In public statements, the company has asserted that “at no point” did it know its services were being used to eavesdrop on Palestinian calls, and that its policies expressly forbid customer use of Azure for offensive targeting.

Yet multiple Unit 8200 insiders describe how, in practice, the cloud repository fed directly into strike planning. When commanders prepared operations against suspects in densely populated neighborhoods, analysts would query Azure for all call records in the vicinity—listening to snippets or full conversations to refine target profiles and timing. They say usage of the system spiked during the 22-month Gaza campaign, which has claimed over 60,000 lives—most of them women and children.

But the system’s origins lie in the occupied West Bank, home to some three million Palestinians under Israeli military rule. Unit 8200 operatives credit the Azure archive with yielding a trove of personal data that could be used not only to track suspects, but to coerce, detain, or even justify lethal force after the fact. “If you lack concrete grounds to arrest somebody,” one source explained, “you can mine the audio logs for an excuse.”

Sariel, Unit 8200’s commander from early 2021 until late 2024, spearheaded the cloud initiative. His tenure began amid a wave of “lone-wolf” stabbings and shootings by young Palestinians in 2015—attacks that bypassed conventional intelligence methods because the perpetrators were previously unknown to Israeli services. In response, Sariel ordered a shift from narrow, target-focused surveillance to a mass-collection model. An early system scanned every text message in the West Bank for keywords—anything from mentions of weapons to expressions of despair—assigning risk scores to each message. Unit 8200 termed the project “noisy message,” reflecting how it filtered a torrent of civilians’ private communications through automated AI classifiers.

By 2021, Sariel was determined to replicate that “noisy message” scale for voice calls. In his Redmond meeting with Nadella, he described needing cloud capacity for “classified, sensitive workloads” but stopped short of spelling out that these workloads consisted of Palestinians’ everyday phone chats. Internal meeting notes, however, credit Nadella with endorsing a phased migration: beginning with a subset of the unit’s data and scaling up to as much as 70 percent of total workloads. Nadella reportedly emphasized “strengthening collaboration” and promised “supporting resources” to achieve that goal.

Meanwhile, some Israeli-based Microsoft employees—several of whom had previously served in Unit 8200—recognized what the project entailed. “It doesn’t take a genius to figure out,” one insider observed, noting that the unit’s claims of running out of on-premises server space, coupled with the need to move “audio files,” made the intent unmistakable. Microsoft, however, has repeatedly denied knowing Azure would be used for the wholesale storage of call recordings.

Several months before approaching Nadella, Sariel had even published (under a nom de plume) a book advocating that intelligence agencies “move to the cloud,” extolling benefits of scalability and flexibility. Within Unit 8200, his reputation as a tech evangelist was well established. He leveraged personal connections—he often boasted of his rapport with Nadella—to secure a hefty budget for the Azure project, which Microsoft executives saw as a major revenue opportunity and a chance to burnish Azure’s credentials. Internal forecasts predicted hundreds of millions of dollars in multi-year revenue and a “significant brand impact” for Microsoft’s cloud platform.

Once the system went live in early 2022, Unit 8200 engineers and Microsoft’s cloud-security specialists worked hand-in-glove to meet the unit’s stringent encryption and access-control requirements. Engineers were instructed to omit any reference to “Unit 8200” in documentation, referring instead to an anonymized “customer project.” The result: an opaque, walled-off environment in Azure where raw intercepts streamed in continually—calls to and from Gaza, the West Bank, Israel, and international destinations—automatically indexed and stored for default retention of about thirty days. However, analysts could trigger extended retention on any individual or region of interest, allowing indefinite archival of specific calls.

For Unit 8200, the appeal of “infinite cloud storage” was transformative. Previously, only pre-designated suspects’ communications were saved; now, any caller’s history could be retrieved retroactively. “We could go back days, weeks—even months—and pull every call made by a person of interest,” one source said. Insiders claim the system has thwarted planned attacks, “saving Israeli lives,” even if it failed to avert the Hamas assault of October 7, 2023, in which militants killed nearly 1,200 people and seized some 240 hostages. In the storm of criticism that followed, Sariel was faulted for prioritizing “exciting new tech” over more proven intelligence practices. He resigned in late 2024, accepting responsibility for Unit 8200’s failure to anticipate or prevent that devastating attack.

Since then, the cloud archive has been used in tandem with a suite of AI-driven targeting tools Sariel helped introduce—algorithms designed to recommend high-value targets to field operators. Those tools have played prominent roles in the ongoing Gaza war, which has wrought massive civilian casualties and a dire humanitarian crisis. Although Israeli strikes have largely obliterated Gaza’s telecom infrastructure, reducing the flow of new calls, many sources say the existing cache of overheard conversations remains a strategic asset. Field officers stationed in Gaza reportedly continue to mine the archive, and enthusiasm for the system persists even as the conflict grinds on and Israel moves toward de facto long-term control of the territory.

From Microsoft’s standpoint, the partnership with Israel’s premier signals-intelligence agency exemplified the convergence of cutting-edge technology and national security needs. Unit 8200 leadership—according to Microsoft filings—projected a tenfold increase in mission-critical cloud workloads in the coming years. For analysts on the Israeli side, the cloud solution addressed a fundamental bottleneck: the prohibitive cost and scaling limits of on-premises military servers. For Microsoft, it was a high-stakes commercial venture that promised to cement Azure’s reputation as the cloud platform of choice for the world’s most demanding, security-conscious organizations.

Yet the deal’s aftermath underscores the ethical quandaries that arise when hyperscale commercial clouds become entwined with state surveillance. On one side stands Microsoft, insisting it enabled only defensive cybersecurity and was blind to the system’s use for civilian call archiving. On the other, Unit 8200 veterans and leaked documents depict a deliberate, large-scale effort to harvest and exploit private conversations—transforming ordinary telephony into a vast, searchable database of human speech. Whether the project has ultimately prevented violence or exacerbated it—and where the line lies between defensive necessity and intrusive overreach—remains fiercely contested.

In the end, the collaboration between Microsoft and Unit 8200 reveals how modern intelligence agencies, confronted by exploding data volumes, turn to global cloud providers for scalable solutions—and how those partnerships can blur the boundaries between corporate services and governmental surveillance powers.