By Ari Hoffnung
This opinion piece first appeared on Ynet Global.
Microsoft, the world’s second most valuable public company, recently took the unprecedented decision to disable Azure cloud and AI services for Israel’s military intelligence, known as Unit 8200.
The decision was applauded by BDS (Boycott, Divestment and Sanctions) activists, who have long sought to drive companies out of Israel to demonize and delegitimize the world’s only Jewish state. The “No Azure for Apartheid” campaign declared victory and vowed to intensify pressure until Microsoft ends all “complicity in the Israeli economy of genocide, occupation, and apartheid.”
As the leader of a Jewish investor network representing more than 30 institutions and $11 billion in assets, I find this decision deeply troubling.
Let me be clear: Microsoft is entitled to enforce its terms of service. If Microsoft ever determines that a customer violates its terms, the company has every right—indeed, the obligation—to act. But this specific action against Israel raises serious questions.
Microsoft insists that its standards apply universally, regardless of geography. Yet, this appears to be the first time the company has unilaterally suspended services to a government under its own policies. (Microsoft restricted services in Russia, but only when legally required by government sanctions—not voluntarily based on any human rights assessments.)
This decision singling out Israel stands in stark contrast to Microsoft’s operations in countries with troubling human rights records, from China’s persecution of Muslims and Christians to South Africa’s rampant crime and policing failures. If Microsoft has curtailed services in those markets based on human rights concerns, such actions remain largely unknown.
There are legitimate debates to be had about surveillance, weighing concerns about privacy and civil liberties with the ability to save lives by countering terrorism. But as a shareholder, there are real business consequences to Microsoft’s treating Israel with a double standard.
First, Microsoft has proven that major tech companies can be pressured into making misguided political decisions. By capitulating to activist pressure, Microsoft has shown that activist campaigns can force trillion-dollar corporations to act against their business interests based on pressure, rather than factual analysis. This victory will embolden BDS activists to target other tech giants like Amazon and Alphabet. The reverberations inside Microsoft have already begun. Just last week, a senior Microsoft engineer publicly resigned after 13 years at the company, citing what he called its “enabling of atrocities” and claiming the firm continues to sell cloud services to Israel’s military. His departure, celebrated by the same “No Azure for Apartheid” network that pushed for Microsoft’s suspension, underscores how appeasement never ends a campaign—it only invites the next demand.
Further, Microsoft has stepped onto a slippery slope. Once a company bends to activist pressure based on misinformed inaccuracies, the line becomes impossible to draw. Today, it is Israel. Tomorrow, it could be any other target of activists’ choosing. If Microsoft enforces standards based on who shouts the loudest, the list will never end. Yet foreign policy is not the role of American corporations. That responsibility belongs to the U.S. government. When Microsoft second-guesses American policy, it assumes a role it is neither elected nor qualified to play.
Microsoft has also introduced unnecessary business risk. By pulling the plug on Israel’s intelligence operations—the only publicly disclosed suspension of its kind—the company has undermined its most important asset: customer trust. Cloud is Microsoft’s second-largest business, accounting for more than $100 billion annual revenue, with Azure at its core.
The entire value proposition of the cloud is that it will always be there for you—just like the servers of yesterday and the file cabinets of yesteryear. Customers must trust that their access is both available and secure. Imagine if your Google Drive or Dropbox account suddenly disappeared without warning—that’s the fear Microsoft has now introduced. If the possibility of such disruption takes hold, confidence in Microsoft’s reliability will erode.
Transparency would be key to alleviating investor concerns. For Microsoft to show that it is applying its policies consistently, the company should publicly disclose: how it monitors terms of service violations by governments, where else it has disabled government services on human rights grounds, and where it has commissioned third-party investigations into customer use. If Israel alone has faced any of these measures, Microsoft owes shareholders an explanation. Without such transparency, the appearance of inconsistency, and ultimately, impropriety, is unavoidable.
These risks underscore why fairness and consistency matter. As with any country, Israel is not immune from scrutiny but singling it out while leaving actually repressive regimes untouched undermines Microsoft’s credibility.
As shareholders, we want Microsoft to thrive. As Jewish advocates, we want companies to treat Israel fairly and champion human rights responsibly. Those goals align—unless standards are enforced selectively.
A company with Microsoft’s global influence does not act in a vacuum. By pulling the plug on Israel to appease activists, Microsoft has shot itself in the foot—emboldening further demands and undermining the trust that sustains its business, a precedent that will haunt the company for years to come.
Ari Hoffnung serves as Managing Director of JLens and Senior Advisor on Corporate Advocacy at ADL.
