The Pentagon has said it is cancelling a cloud computing contract with Microsoft that could eventually have been worth 10 billion dollars (£7 billion) and will instead pursue a deal with both Microsoft and Amazon.
“With the shifting technology environment, it has become clear that the Jedi Cloud contract, which has long been delayed, no longer meets the requirements to fill… capability gaps,” the Pentagon said in a statement.
The statement did not directly mention the Pentagon faced extended legal challenges by Amazon to the original contract awarded to Microsoft.
Amazon Web Services, a market leader in cloud computing, had long been considered a leading candidate to run the Pentagon’s Joint Enterprise Defence Infrastructure project, known as Jedi.
The project was meant to store and process vast amounts of classified data, allowing the US military to improve communications with soldiers on the battlefield and use artificial intelligence to speed up its war planning and fighting capabilities.
The Jedi contract became mired in legal challenges almost as soon as it was awarded to Microsoft in October 2019.
The losing bidder, Amazon Web Services, went to court arguing that the Pentagon’s process was flawed and unfair, including that it was improperly influenced by then-president Donald Trump’s dislike of Amazon and its chief executive officer, Jeff Bezos, who owns the Washington Post, a news outlet often criticised by Mr Trump.
This year the Pentagon had been hinting it might scrap the contract, saying in May that it felt compelled to reconsider its options after a federal judge in April rejected a move to have key parts of Amazon’s lawsuit dismissed.