Microsoft signed a contract worth about $125.4 million with Israel’s defence ministry in 2024, according to documents published by Israel’s Ministry of Finance.
The agreement appears in Israel’s 2024 annual budget-execution report, published by the finance ministry’s accountant general in March 2025. The report lists an agreement signed with Microsoft for the purchase of software licensing worth about 464 million shekels.
According to the document, the full value of the contract remained outstanding as of December 31, 2024, meaning Israel had not paid under the agreement during that year. The engagement is expected to run until 2027.
The report does not identify the software covered by the agreement, the defence ministry bodies or military units that would use it, or whether the 2027 date refers to the licence period, payment schedule or both.
The contract could represent a renewal of an earlier agreement signed between Microsoft and the Israeli military in 2021, according to former Microsoft employees who have tracked the company’s contracts in Israel.
An internal document reviewed by a wire agency last year showed that Microsoft signed a $133 million, three-year contract with the Israeli military in 2021. AP also reported that Microsoft classified the Israeli military as an “S500” client, a designation for the company’s highest-priority customers.
AP identified at least 635 subscriptions held by the Israeli military, including accounts linked to “Mamram” and “8200”, with 8200 referring to an Israeli cyberwarfare unit.
The 2021 agreement and the 2024 contract both cover three-year periods and have similar values. However, Israel’s budget report does not describe the 2024 agreement as a renewal.
The 2024 licensing agreement also predates reports about Microsoft’s cloud services being used by the Israeli military. In August 2025, the Guardian, together with +972 Magazine and Local Call, reported that Unit 8200 had used Microsoft’s Azure cloud platform to store recordings of millions of phone calls involving Palestinians in Gaza and the illegally occupied West Bank.
Internal documents obtained by AP showed Microsoft’s global Azure support team responded to around 130 direct requests from the Israeli military during the first 10 months of the genocide.
Microsoft later commissioned an external review by law firm Covington & Burling. Microsoft President Brad Smith said the company had “ceased and disabled a set of services to a unit within the Israel Ministry of Defense.”
The 2024 budget document does not link the software licensing agreement to the cloud or AI services Microsoft later disabled. It records the licensing engagement as an unpaid, multi-year commitment running until 2027.
Microsoft has maintained licensing arrangements with Israeli government bodies for more than two decades. Documents also showed at least nine Microsoft employees dedicated to serving the Israeli military, including a senior executive who previously spent 14 years in Unit 8200 and a former IT leader for military intelligence.
Microsoft operates server farms in two buildings outside Tel Aviv, a 46,000-square-metre campus in Herzliya and an office in Gav-Yam in southern Israel.
Since October 2024, Microsoft has fired at least nine employees over protests against its business with Israel, while more than a dozen employees have been fired or arrested.
Abdo Mohamed, a former Microsoft data scientist and organiser with No Azure for Apartheid, said that the contract showed Microsoft’s continuing involvement with Israel’s military and government.
“The newly revealed deal cements the active role Microsoft, its technologies and its executives play in powering Israel’s apartheid and genocide,” Mohamed said.
He also said that Microsoft executives “chose willingly to double down on their complicity in genocide and apartheid” by signing the contract during 2023 and 2024.
The Microsoft agreement forms part of 33 defence engagements recorded by Israel’s defence ministry for 2024, with a combined value of about $13.6 billion. Most of the spending involved fighter aircraft, ammunition and air-defence systems, largely purchased from the United States (US) government.
