Pentagon rejects Microsoft's $10 billion deal to supply cloud services

Ouch, The U.S. Defense Department has ended a $10 billion JEDI cloud computing project, designating Microsoft as a cloud service company for the Defense Department. The Pentagon re-contracts and divides the job among multiplefirms.

For now, only Microsoft and Amazon are able to meet the Pentagon's requirements, so only those two companies can now compete for the contract. Other parties have yet to prove themselves. Microsoft and Amazon are not automatically assigned the deal. The companies should come up with proposals on how they will meet the requirements of the government.

With the JEDI contract, the Pentagon was expected to make major strides in artificial intelligence. The cloud could also secure large amounts of classified data and quickly distribute information among military personnel. The lucrative ten-year contract was awarded to Microsoft by the US government in 2019. This happened to the great dismay of competitor Amazon, which challenged the decision. According to Amazon, political games by the Trump administration were behind the decision to do business with Microsoft. It is known that former US President Donald Trump is not a fan of then Amazon boss Jeff Bezos. Trump had previously openly mocked Amazon's bid for the contract and postponed the award. Trump also regularly criticized Amazon.

For those in the know, Amazon's bid to compete for the JEDI contract was considered particularly promising, especially since Amazon Web Services already supplies classified servers to the CIA.

Microsoft calls US security the most important
Microsoft said in response it understood and respected the decision to drop the contract as the Defense Department would face a lengthy battle in court. "The security of the United States is more important than any contract," the company said. Amazon did not immediately respond to a request for comment. The future of the JEDI cloud program was called into question earlier this year. Defense officials previously said they would tear up the contract if it turns out that Trump's political interference was the reason Amazon misfired in the first place.