Amazon is considering its options for how to move forward following the decision to award a massive government contract to its competitor, Microsoft, according to a source familiar with the situation. One analyst said he “fully expects” Amazon to try to fight the decision in court.
The contract — called Joint Enterprise Defense Infrastructure, or JEDI — involves providing cloud storage of sensitive military data and technology such as artificial intelligence to the Department of Defense, and could result in a payoff of up to $10 billion over 10 years for Microsoft.
The contentious decision represents a major loss for Amazon (AMZN) and a boon to Microsoft (MSFT), especially as both companies have seen the growth of their cloud businesses slow in recent months. It also threatens to undermine Amazon (AMZN)’s position as the clear leader in the cloud industry and CEO Jeff Bezos’ title as richest man in the world.
Friday’s decision came after months of controversy and protest over the process for awarding the deal and President Donald Trump’s public criticism of Amazon, long considered the frontrunner.