Amazon founder Jeff Bezos saw his net worth surge to a record-breaking $211 billion following the Pentagon’s decision to cancel the Joint Enterprise Defense Infrastructure (JEDI) cloud-computing contract, which was initially awarded to Microsoft in 2019. This massive increase in Bezos’s wealth came after Amazon’s shares rose 4.7%, as reported by the Bloomberg Billionaires Index.
Pentagon Cancels JEDI Contract
The US Department of Defense (DoD) announced the cancellation of the $10 billion JEDI contract on Tuesday, citing evolving requirements and advancements in cloud technology as the main reasons for its decision. The Pentagon plans to replace JEDI with a new project, Joint Warfighter Cloud Capability, for which both Microsoft and Amazon can now compete. John Sherman, the Pentagon’s chief information officer, indicated that while Amazon and Microsoft are currently the leading contenders, other cloud providers like Google, IBM, and Oracle could also qualify.
Amazon’s Legal Battle and Influence Claims
The cancellation of the contract came as a significant development for Amazon, which had filed a lawsuit in 2019 challenging the Pentagon’s decision to award JEDI to Microsoft. At the time, Amazon argued that the decision had been influenced by former President Donald Trump’s antagonism toward Jeff Bezos, particularly due to his ownership of The Washington Post. However, a report from the Pentagon’s inspector general last year found no clear evidence of interference from the White House in the procurement process, though it acknowledged limited cooperation from the Trump administration, leaving some aspects of the issue unresolved.
The Future of Cloud-Computing Contracts
With the JEDI contract now officially canceled, the DoD is gearing up for a new cloud infrastructure initiative, presenting both Amazon Web Services (AWS) and Microsoft with fresh opportunities to secure parts of the contract. Despite this, there are no guarantees for either company. Both Amazon and Microsoft have expressed confidence in their technology and their ability to meet the Pentagon’s future cloud requirements.
Amazon agreed with the Pentagon’s decision to cancel the previous contract, maintaining that the original 2019 award had been influenced by external factors unrelated to the quality of their proposal.
