Pentagon stops Jedi deal – Amazon and Microsoft in the race for a follow-up order
For a long time, Amazon and Microsoft fought for the multi-billion dollar Jedi project. Now the Pentagon has stopped it. The successor deal should again be won by one of the two tech companies.
In October 2019, the US Department of Defense surprisingly awarded the Jedi (Joint Enterprise Defense Infrastructure) project to modernize the agency’s IT infrastructure to Microsoft. Amazon, which had previously had high hopes of winning the contract, went to court. One of the allegations: Amazon’s intimate enemy and ex-US President Donald Trump are said to have played a role. The litigation continues to this day. The Pentagon has now pulled the rip cord.
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Jedi project stopped, new deal is coming
On Tuesday, the US Department of Defense announced that it had stopped the Jedi project. The reason given by the authorities was that the Jedi deal no longer met the requirements. In the end, the demands on the IT infrastructure, for example due to a more extensive conversation via the cloud, have increased significantly. Accordingly, the Pentagon announced the invitation to tender for a new contract, which it calls Joint Warfighter Cloud Capability.
According to the ministry, Amazon and Microsoft could also apply for this again. The two US tech companies are the only two cloud providers that meet the requirements of the US Department of Defense. One of these requirements of the Pentagon is according to CNBCthat it is possible to also serve the top secret level, that the company in question operates worldwide and has first-class cybersecurity controls.
Microsoft accepts the Pentagon decision
Microsoft commented on the Pentagon decision in a post on its company blog. The company understands the decision to call off the Jedi project. However, the protracted legal battle had shown that the type of tender had to be reformed. In addition, according to Microsoft, the project does not change the fact that Microsoft and the Pentagon are a good technological fit. Amazon has not yet commented on this. While the Microsoft share fell slightly in an initial reaction, the Amazon paper was able to gain on Tuesday evening.
The Pentagon has not yet commented on the specific order volume. The Jedi deal comprised roughly $ 10 billion that would have been paid out over a ten-year period. The new Joint Warfighter Cloud Capability project only states that it is worth billions of dollars. The Pentagon still has to determine the maximum value. However, the contract should only run for five years, the last two of which are one-year periods with the option of termination.
