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Miller: Microsoft Beats Amazon to Pentagon Contract … All Hell Breaks Loose

Miller: Microsoft Beats Amazon to Pentagon Contract … All Hell Breaks Loose

A $10 billion contract with the U.S. Department of Defense has rocketed shares of Microsoft Corp. to record highs Monday.

The contract — the Joint Enterprise Defense Infrastructure (JEDI) — is for cloud computing services within the department, specifically the Pentagon.

The award came as a bit of a surprise considering Microsoft’s biggest rival for the contract, Amazon.com Inc., already manages cloud computing for the Central Intelligence Agency.

Many believed Amazon receiving the massive contract was all but a foregone conclusion.

Even Amazon.

“We’re surprised about this conclusion. AWS is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly lead to a different conclusion,” an AWS spokesperson told NPR in a statement.

In addition, previous competitors for the contract, Oracle and IBM, previously sued to hold off on the award, citing the Defense Department has “unfairly favored Amazon over other potential vendors,” according to NPR.

However, the Government Accountability Office said the bidding process was aboveboard.

While politics is likely the largest factor in the award — President Donald Trump has feuded with Amazon founder Jeff Bezos and Congressional Republicans had pressed the Defense Department to work with other vendors besides Amazon — Microsoft has come out a big winner.

That, despite strife within the walls in Seattle over the company even bidding on the JEDI contract.

Mid-afternoon trading showed Microsoft Corp. up nearly 4% on the day, at $144.25 per share.

Microsoft Amazon

 

It’s 52-week high is $145.67, which it was close to topping earlier in the morning. The stock was still trading well above its Friday close price of $140.73.

By winning the JEDI contract, Microsoft will store large amounts of sensitive military data as well as putting artificial intelligence access in the hands of the U.S. military