A proposal motivated by concerns about how Microsoft products were allegedly used by Israel's military in the Gaza war was rejected by shareholders on Friday.
The Religious of the Sacred Heart of Mary, an international Catholic women's organisation, was the lead filer of the resolution, which called on Microsoft to assess the effectiveness of its human rights due diligence processes (HRDD).
"Recent allegations of severe customer misuse suggest Microsoft’s HRDD may be ineffective," the proposal read.
"Several reports have alleged Israel’s use of Microsoft’s Al and cloud services and technologies in its attacks against Palestinian civilians and civilian objects, five which have been labelled war crimes and crimes against humanity."
In July, the organisation expressed hope that the proposal would push Microsoft to evaluate its effectiveness in promoting HRDD related to artificial intelligence.
At least 60 other organisations and individuals co-signed the proposal, which was one of several submissions for voting at the shareholders' meeting.
"Shareholders did not approve any of the six shareholder proposals," a company representative said during the meeting.
For much of the year, Microsoft has come under criticism from activists, tech analysts and even employees over its contracts with Israel's military amid the war in Gaza.
Protests against the company have been plentiful, including from groups such as No Azure for Apartheid, which alleges that Microsoft's AI and cloud products are being used to target Palestinians.
In April, Mustafa Suleyman, Microsoft's head of AI, was interrupted by former employees at a company event.
"Stop using AI for genocide," the protesters shouted before being escorted out of the auditorium.
Israel's campaign in Gaza – which followed the 2023 attacks by Hamas-led fighters that resulted in the deaths of about 1,200 people and the capture of 240 hostages – has killed at least 70,100 people and injured more than 170,985.
An initial internal review by Microsoft in May found “no evidence” of the allegations. But the review also included a caveat acknowledging that because of the way software and AI tools are used by organisations, the company's investigation might have been limited.
A few months later, Microsoft decided to disabled a set of services for a unit in Israel's Ministry of Defence as the technology giant continued to investigate.
Before the shareholder vote on Friday, Microsoft's board expressed opposition to the proposal.
"Microsoft has a longstanding robust human rights due diligence programme firmly aligned with the UN Guiding Principles on Business and Human Rights, the Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises, and other international standards," a statement read.
"Given this comprehensive approach and the existence of third-party evaluations of the effectiveness of our due diligence processes, the board believes the additional report requested by the shareholder proposal is unnecessary."
Other companies, including Palantir, Lockheed Martin, Booz Allen Hamilton and Google, have also come under scrutiny for contracts with Israel.
