In this 2017 file photo,President Donald Trump (left) and Satya Nadella, Chief Executive Officer of Microsoft (center), listen as Jeff Bezos, Chief Executive Officer of Amazon, speaks during an American Technology Council roundtable in the State Dining Room of the White House in Washington. Amazon and Microsoft are battling for a $10 billion opportunity to build the U.S. military its first “war cloud.” (AP Photo/Alex Brandon, File)

In this 2017 file photo,President Donald Trump (left) and Satya Nadella, Chief Executive Officer of Microsoft (center), listen as Jeff Bezos, Chief Executive Officer of Amazon, speaks during an American Technology Council roundtable in the State Dining Room of the White House in Washington. Amazon and Microsoft are battling for a $10 billion opportunity to build the U.S. military its first “war cloud.” (AP Photo/Alex Brandon, File)

Amazon, Microsoft wage war over the Pentagon’s ‘war cloud’

The project faces growing congressional concerns about alleged Pentagon favoritism toward Amazon.

By Matt O’Brien / Associated Press

Amazon and Microsoft are battling it out over a $10 billion opportunity to build the U.S. military its first “war cloud” computing system. But Amazon’s early hopes of a shock-and-awe victory may be slipping away.

Formally called the Joint Enterprise Defense Infrastructure plan, or JEDI, the military’s computing project would store and process vast amounts of classified data, allowing the Pentagon to use artificial intelligence to speed up its war planning and fighting capabilities. The Defense Department hopes to award the winner-take-all contract as soon as August. Oracle and IBM were eliminated at an earlier round of the contract competition.

But that’s only if the project isn’t derailed first. It faces a legal challenge by Oracle and growing congressional concerns about alleged Pentagon favoritism toward Amazon. Military officials hope to get started soon on what will be a decade-long business partnership they describe as vital to national security.

“This is not your grandfather’s internet,” said Daniel Goure, vice president of the Lexington Institute, a defense-oriented think tank. “You’re talking about a cloud where you can go from the Pentagon literally to the soldier on the battlefield carrying classified information.”

Amazon was considered an early favorite when the Pentagon began detailing its cloud needs in 2017, but its candidacy has been marred by an Oracle allegation that Amazon executives and the Pentagon have been overly cozy. Oracle has a final chance to make its case against Amazon — and the integrity of the government’s bidding process — in a court hearing Wednesday.

“This is really the cloud sweepstakes, which is why there are such fierce lawsuits,” said Wedbush Securities analyst Daniel Ives.

Ives said an opportunity that was a “no brainer” for Amazon a year ago now seems just as likely to go to Microsoft, which has spent the past year burnishing its credentials to meet the government’s security requirements.

For years, Amazon Web Services has been the industry leader in moving businesses and other institutions onto its cloud — a term used to describe banks of servers in remote data centers that can be accessed from almost anywhere. But Microsoft’s Azure cloud platform has been steadily catching up, as have other providers such as Google, in both corporate and government settings.

With an acronym evoking Star Wars and a price tag of up to $10 billion over the next decade, JEDI has attracted more attention than most cloud deals. A cloud strategy document unveiled by the Defense Department last year calls for replacing the military’s “disjointed and stove-piped information systems” with a commercial cloud service “that will empower the warfighter with data and is critical to maintaining our military’s technological advantage.”

In a court filing last month, Lt. Gen. Bradford Shwedo said further delays in the Oracle case will “hamper our critical efforts in AI” as the U.S. tries to maintain its advantage over adversaries who are “weaponizing their use of data.” Shwedo said JEDI’s computing capabilities could help the U.S. analyze data collected from surveillance aircraft, predict when equipment needs maintenance and speed up communications if fiber and satellite connections go down.

Amazon was considered an early front-runner for the project in part because of its existing high-security cloud contract with the Central Intelligence Agency. It beat out IBM for that deal in 2013.

Worried that the Pentagon’s bid seemed tailor-made for Amazon, rivals Oracle and IBM lodged formal protests last year arguing against the decision to award it to a single vendor.

In an October blog post , IBM executive Sam Gordy wrote that a single-cloud approach went against industry trends and “would give bad actors just one target to focus on should they want to undermine the military’s IT backbone.”

The Government Accountability Office later dismissed those protests, but Oracle persisted by taking its case to the Court of Federal Claims, where it has pointed to emails and other documents that it says show conflicts of interest between Amazon and the government. Oral arguments in that case are scheduled for Wednesday. The case has delayed the procurement process, though the Pentagon says it hopes to award the contract as early as Aug. 23.

Oracle’s argument is centered on the activities of a Defense Department official who later went to work for Amazon. Amazon says Oracle has exaggerated that employee’s role in the procurement using “tabloid sensationalism.”

Some defense-contracting experts say the conflict allegations are troubling.

“No one seems to deny that these were actual conflicts and the players affirmatively attempted to conceal them,” said Steven Schooner, a professor of government procurement law at George Washington University. “That simply cannot be tolerated.”

But Goure, whose think tank gets funding from Amazon but not from its cloud rivals Microsoft, Oracle or IBM, said the criticism is “coming from the also-rans.” He says rivals like Oracle “missed the boat” in cloud technology and are trying to make up lost ground through legal maneuvers.

The Pentagon has repeatedly defended its bidding process, though the concerns have trickled into Congress and onto prime-time TV. Fox News host Tucker Carlson devoted a segment last month to the cloud contract that questioned an Amazon executive’s 2017 meeting with then-Defense Secretary Jim Mattis. Carlson also aired concerns by Republican Rep. Mark Meadows, who said “the allegations are incredible” and should be investigated.

A Wall Street Journal report on Sunday further detailed government emails about that meeting and another one between Mattis and Amazon CEO Jeff Bezos later that year. Sen. Chuck Grassley, an Iowa Republican, said in an emailed statement Tuesday that there are so many questions that the Pentagon should “restart the whole process” and wait until its inspector general can thoroughly review for potential conflicts.

Amazon said in a statement Tuesday the meetings “had nothing to do with the JEDI procurement” and blamed “misinformed or disappointed competitors” for trying to imply otherwise.

Pentagon spokeswoman Elissa Smith said while military leaders are expected to engage with industry, no one in the defense secretary’s “front office” participated in drafting the contract requirements or soliciting bids.

Ives said it remains to be seen how much the conflict allegations will hurt Amazon or help Microsoft. Microsoft has largely stayed quiet during the dispute. In a statement, it focused on highlighting its 40-year partnership supplying the military with services such as email.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Lily Lamoureux stacks Weebly Funko toys in preparation for Funko Friday at Funko Field in Everett on July 12, 2019.  Kevin Clark / The Herald)
Everett-based Funko ousts its CEO after 14 months

The company, known for its toy figures based on pop culture, named Michael Lunsford as its interim CEO.

The livery on a Boeing plane. (Christopher Pike / Bloomberg)
Former Lockheed Martin CFO joins Boeing as top financial officer

Boeing’s Chief Financial Officer is being replaced by a former CFO at… Continue reading

Izaac Escalante-Alvarez unpacks a new milling machine at the new Boeing machinists union’s apprentice training center on Friday, June 6, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Boeing Machinists union training center opens in Everett

The new center aims to give workers an inside track at Boeing jobs.

Some SnoCo stores see shortages after cyberattack on grocery supplier

Some stores, such as Whole Foods and US Foods CHEF’STORE, informed customers that some items may be temporarily unavailable.

People take photos and videos as the first Frontier Arlines flight arrives at Paine Field Airport under a water cannon salute on Monday, June 2, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Water cannons salute Frontier on its first day at Paine Field

Frontier Airlines joins Alaska Airlines in offering service Snohomish County passengers.

Amit B. Singh, president of Edmonds Community College. 201008
Edmonds College and schools continue diversity programs

Educational diversity programs are alive and well in Snohomish County.

A standard jet fuel, left, burns with extensive smoke output while a 50 percent SAF drop-in jet fuel, right, puts off less smoke during a demonstration of the difference in fuel emissions on Tuesday, March 28, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
Sustainable aviation fuel center gets funding boost

A planned research and development center focused on sustainable aviation… Continue reading

Helion's 6th fusion prototype, Trenta, on display on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Helion celebrates smoother path to fusion energy site approval

Helion CEO applauds legislation signed by Gov. Bob Ferguson expected to streamline site selection process.

Pharmacist John Sontra and other employees work on calling customers to get their prescriptions transferred to other stores from the Bartell Drugs Pharmacy on Hoyt Avenue on Wednesday, July 2, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Bartell Drugs location shutters doors in Everett

John Sontra, a pharmacist at the Hoyt Avenue address for 46 years, said Monday’s closure was emotional.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.