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Microsoft Ads does not offer automatic IP blocking via any automation like API. Instead, IPs need to be blocked manually via your Microsoft Ads account.
To block specific IP addresses from seeing your ads:
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Go to All campaigns -- Campaigns located along the top of the page.
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Click the Campaigns tab located in the middle of the page. Select the checkbox next the campaigns where you want to add the exclusion.
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Click on Edit, and then click on Other changes.
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In the Campaign settings list, select IP address exclusions. There, enter the IP addresses that you want to be blocked from seeing your ads.
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Enter one IP address per line.
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You can also add a range of addresses using a wildcard character (*).
After you are done making the desired changes, click Apply.
Note:
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All Microsoft Advertising IP exclusions must be added at the campaign level, not the ad group level.
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You can exclude a maximum of 100 IP addresses (or IP address ranges) per campaign.
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You can only exclude IPv4 addresses.
More details in Microsoft's help center
If you have any questions about this process, feel free to reach out to our 24/7 chat support.