The Pentagon may drop the controversial cloud-computing program that led to a lawsuit from Amazon.com (AMZN) - Get Amazon.com, Inc. Report, according to reports from The Wall Street Journal and others.
The Pentagon granted a $10 billion, 10-year contract to Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report in 2019 for the Joint Enterprise Defense Infrastructure, or JEDI, contract. The program would consolidate the Pentagon’s disparate data systems and enhance its artificial-intelligence capacity.
Amazon quickly filed suit over the decision. In April, a federal judge turned down the Defense Department’s motion to dismiss much of Amazon's case. After that, the department said it would review the project.
“We’re going to have to assess where we are with regard to the ongoing litigation around JEDI and determine what the best path forward is for the department,” said Deputy Defense Secretary Kathleen Hicks at an April 30 security conference organized by the nonprofit Aspen Institute, the Journal reported.
Microsoft told the Journal it was ready to continue the project, despite the problems.
“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,” Microsoft said. “We stand ready to support the Defense Department to deliver on JEDI and other mission critical DoD projects.”
Amazon was at $3,279, down 0.38%, in premarket trading Monday and Microsoft was at $251.49, also down 0.38%.