Court Battle With Amazon May Force Pentagon To Scrap “JEDI” Cloud-Computing Program

By Tyler Durden

Has Jeff Bezos overpowered the Pentagon with legal firepower?

Amazon’s legal battle with the Pentagon over its decision to grant its $10 billion JEDI cloud-computing contract to rival Microsoft may finally succeed in scuppering the program altogether.

WSJ reports that Pentagon officials are considering scuttling the program, possibly in favor of a different model that will involve parceling out pieces of the contract to various companies, something that would lower the legal risks associated with the project.

JEDI, or the ‘Joint Enterprise Defense Infrastructure’ contract, was awarded to Microsoft in 2019 over Amazon, which has contested the award in court ever since, claiming that then-President Donald Trump interfered to sway the award to Microsoft over Amazon over Jeff Bezos’ ownership of the Washington Post.

The Pentagon first suggested that it might cancel the program after a federal judge refused to dismiss Amazon’s challenge.

In order to avoid any future legal challenges, WSJ says the Pentagon would likely scrap JEDI and instead adopt an increasingly popular approach to consolidate its current patchwork of data systems via a contract that spreads the work across Microsoft, Amazon and the other major American firms who competed for the original JEDI contract.

Of course, according to the Pentagon, the US is falling further behind its adversaries every year that JEDI is delayed. The new IT framework is seen as essential for developed advanced AI technologies.

Republican Rep. Steve Womack called on the Pentagon last week to scrap JEDI and start fresh with a new contract-bidding process that would “enable best-in-class capability by prioritizing the ongoing competition that a cloud environment can promote.”

While Amazon declined to comment to WSJ for its report, Microsoft said that it’s ready to continue work on JEDI, though it understands the Pentagon’s legal predicament. “We agree with the U.S. [government] that prolonged litigation is harmful and has delayed getting this technology to our military service members who need it,” the company said. “We stand ready to support the Defense Department to deliver on JEDI and other mission critical DoD projects.”

While Microsoft investors probably wouldn’t welcome news of the company losing a $10 billion contract in favor of a more “collaborative” approach” envisioned by the Pentagon’s critics, at least the company has already secured its next major Pentagon contract – worth some $22 billion over a period of more than a decade  – to build AR headsets based on its much-malilgned “HoloLens”.

Source: Zero Hedge

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