Amazon, Microsoft Battle Over Pentagon's "War Cloud" Contract 

Amazon and Microsoft are in the final stretches of a fierce battle to win a $10 billion contract to build an artificial intelligence (AI) driven cloud for the US military, reported the Associated Press (AP).

Formely called the Joint Enterprise Defence Infrastructure Plan (JEDI), the military's next-generation computing project would store vast amounts of classified data that can be quickly analyzed by AI to help war planners make rapid decessions.

The "War Cloud" was first unveiled in a strategy report last year, stating: "Cloud is a fundamental component of the global infrastructure that will empower the warfighter with data and is critical to maintaining our military's technological advantage."

"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."

Securities analyst Daniel Ives at Wedbush said the opportunity to develop the War Cloud was a "no brainer" for Amazon a year ago -- now seems like the contract could also go to Microsoft.

Amazon Web Service has been a dominant player in transitioning businesses, government, and other institutions onto the cloud. But Microsoft's Azure cloud platform is steadily catching up to meet the high standards of corporate and government environments.

Amazon has been considered the front-runner for the War Cloud because of its existing cloud contracts with the Central Intelligence Agency.

Rivals Oracle and IBM were eliminated at an earlier round of the contract competition, have launched formal protests last year arguing the Pentagon's cloud contract seemed tailor-made for Amazon.

BM executive Sam Gordy wrote in an October blog post that a single-cloud program would be a dangerous move by the military 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 has since dropped those protest, but Oracle managed to take it to the Court of Federal Claims, where it showed emails and other documents indicating there was a significant conflict of interest between Amazon and the military. Oral arguments, in that case, are scheduled for this week.

Defense-contracting specialists who spoke with AP say the conflict allegations are disturbing.

"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."

Goure, whose defense-oriented think tank receives funding from Amazon, said the criticism is "coming from the also-rans." He said rivals like Oracle "missed the boat" in the cloud and are using lawyers to close the technology gap. 

The Pentagon launched an info-war on prime-time TV to defend its bidding process. Fox News host Tucker Carlson recently aired a segment that questioned an Amazon executive's 2017 meeting with then-Defense Secretary Jim Mattis. Carlson had Republican Rep. Mark Meadows as a guest, who said "the allegations are incredible" and should be investigated.