Pentagon Cancels $10 Billion JEDI Cloud Deal Awarded To Microsoft

The Department of Defense on Tuesday announced the cancellation of a $10 billion ‘JEDI’ cloud services contract awarded to Microsoft in 2019, instead of Amazon – which thought it was a shoe-in before the Trump administration told Bezos and crew to pound sand.

According to the Pentagon, “due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer meets its needs.”

That said, the DoD wants Amazon and Microsoft to ‘split’ a new version of JEDI – as the need for enterprise-scale cloud capabilities still exists, according to CNBC.

The Pentagon said in the press release that it still needs enterprise-scale cloud capability and announced a new multi-vendor contract known as the Joint Warfighter Cloud Capability. The agency said it plans to solicit proposals from both Amazon and Microsoft for the contract, adding that they are the only cloud service providers that can meet its needs.

The lucrative JEDI contract was intended to modernize the Pentagon’s IT operations for services rendered over as many as 10 years. Microsoft was awarded the cloud computing contract in 2019, beating out market leader Amazon Web Services.

A month later, Amazon’s cloud computing unit filed a lawsuit in the U.S. Court of Federal Claims protesting the JEDI decision.

The company argued that President Donald Trump’s bias against Amazon and its CEO, Jeff Bezos, influenced the Pentagon to give the contract to Microsoft. -CNBC

In 2020, the Pentagon’s IG issued a report which concluded that the JEDI award did not appear to be influenced by the White House, though it noted that their office had received ‘limited cooperation’ from White House officials during its review – and could not complete its assessment of allegations that ethical misconduct had occurred.

A nice consolation prize for Bezos if he really does end up losing the race to space to Branson…$AMZN $MSFT https://t.co/IJs7KGFII1

— Dominic Chu (@TheDomino) July 6, 2021

According to the Associated Press, the Pentagon had been hinting at scrapping the contract – saying in May that it was reassessing its options after a federal judge dismissed the DOJ’s attempts to have key parts of Amazon’s lawsuit dismissed.

Microsoft shares went ‘soft’ on the news: