An investigation by Middle East Eye has uncovered a previously hidden $125.4 million software licensing contract between tech giant Microsoft and Israel’s Ministry of Defense, signed in 2024 amid growing global outcry over the company’s military ties to Israel. The details of the agreement were buried deep within Israel’s 2024 annual budget execution report, published by the country’s finance ministry in March 2025, and only came to light after a close analysis of hundreds of entries in the document’s procurement commitments section.
Buried among the list of the defense ministry’s largest multi-year procurements, the entry confirms the 2024 agreement is valued at approximately 464 million Israeli shekels. As of the end of December 2024, the full contract value remains outstanding, with no payments disbursed that year, and the engagement is scheduled to conclude in 2027. The public budget document provides no additional details about what specific software is covered under the deal, which Israeli defense or military units will access the licensing, or whether the 2027 end date refers to the license term, the payment schedule, or both.
When reached for comment by Middle East Eye, Microsoft declined to answer any questions about the newly uncovered contract, stating only that it had “nothing to add from our side.”
This new agreement aligns closely with a 2021 $133 million three-year contract between Microsoft and the Israeli military previously exposed by the Associated Press. That investigation revealed the Israeli military was classified as an “S500” client, a status reserved for Microsoft’s highest-priority customers, and included more than 600 individual subscriptions linked to key Israeli military units, including the elite cyberwarfare division Unit 8200. Former Microsoft employees familiar with the company’s Israeli contracts told MEE the 2024 agreement is almost certainly a three-year renewal of the 2021 deal, matching both the timeline (running 2024–2027) and the similar contract value. The Israeli budget document does not explicitly label the agreement as a renewal.
The newly revealed contract predates the 2025 public controversy over Microsoft’s provision of cloud services to the Israeli military. In August 2025, a joint investigation by The Guardian, +972 Magazine and Local Call reported that Unit 8200 had used Microsoft’s Azure cloud platform to store recordings of millions of phone calls from Palestinians in Gaza and the occupied West Bank, with the database directly supporting Israeli military operations and air strike planning. Subsequent reporting by the Associated Press found that Microsoft’s global Azure support team responded to roughly 130 direct requests from the Israeli military in the first 10 months of the 2023–2024 Gaza war. Following the controversy, Microsoft commissioned an external review from law firm Covington & Burling, after which company president and vice chair Brad Smith announced Microsoft had “ceased and disabled a set of services to a unit within the Israel Ministry of Defense.” A leaked internal email later confirmed the company only disabled a small subset of services for a single Israeli military unit, with no additional details provided.
The 2024 licensing agreement, recorded in the budget as of December 2024 (nine months before the service disablement), shows no connection to the small set of cloud and AI services Microsoft cut. The contract is explicitly categorized as software licensing, not the cloud or AI services that were the subject of the controversy. Microsoft has publicly confirmed that the vast majority of its existing business with the Israeli military remains active, a partnership that stretches back more than two decades. Internal documents show Microsoft maintains a dedicated team of at least nine employees focused solely on serving the Israeli military, including a senior executive who spent 14 years in Unit 8200 and a former IT leader for Israeli military intelligence. The company also maintains a substantial physical footprint in Israel, including two large server farm facilities outside Tel Aviv, a 46,000-square-meter campus in Herzliya, and a southern office that flies a large Israeli flag.
Critics say the new contract offers clear evidence of Microsoft’s ongoing complicity in human rights violations against Palestinians. Abdo Mohamed, a former Microsoft data scientist fired after organizing a vigil for Palestinian victims at the company’s Redmond, Washington headquarters and now an organizer with the activist campaign No Azure for Apartheid, called the contract proof that company leadership intentionally doubled down on its profitable military ties amid the war. “The newly revealed deal cements the active role Microsoft, its technologies and its executives play in powering Israel’s apartheid and genocide,” Mohamed told MEE. “As Israel intensified its ongoing genocidal and ethnic cleansing campaign all over Palestine in 2023 and 2024, and as workers with our campaign at Microsoft spoke out in protest of its genocide profiteering business, Microsoft executives chose willingly to double down on their complicity in genocide and apartheid by signing this contract worth over $100m.” Mohamed added that the deal’s timing coincided with a surge in Israeli military use of Microsoft’s cloud and AI services, which reached up to 200 times pre-October 2023 levels in some use cases. “That’s why our campaign continues to apply pressure until Microsoft puts an end to its genocide-profiteering business with the Israeli military and government,” he said.
Union organizers say growing worker outrage over the contract has spurred new efforts to organize tech workplaces to push for change. Marcus Barnett, a spokesperson for the United Tech and Allied Workers section of the UK’s Communication Workers Union, noted that tech workers are not disconnected from the global outcry over the war. “Tech workers haven’t been isolated from the rest of the world witnessing war and genocide dominate the news headlines and our phone screens,” Barnett said. “It’s no surprise that many are turning to workplace organising to assert their humanity, and we urge anyone with real concerns to stand up and form a workplace union to articulate these issues with strength.”
Since October 2024, Microsoft has fired at least nine employees over protests against its Israeli military business, with more than a dozen total facing termination or arrest for speaking out against the partnership. The 2024 Microsoft contract is one of 33 major defense procurement deals signed by Israel that year, with the full set of agreements totaling $13.6 billion. The vast majority of that value comes from arms and military hardware purchases, mostly from the U.S. government, with Microsoft’s deal among a small handful of non-hardware engagements. The Israeli defense ministry does not label the Microsoft contract as explicitly war-related, and routine software licensing renewals for government entities are not inherently tied to military operations. MEE contacted the Israeli government and Israeli embassy in the UK for comment but received no response.