What is the Jedi contract?
The Joint Enterprise Defense Infrastructure (JEDI) contract was a large United States Department of Defense cloud computing contract which has been reported as being worth $10 billion over ten years. wikipedia.orgJoint Enterprise Defense Infrastructure - Wikipedia
Amazon chairman Jeff Bezos, already the world's wealthiest man, has set a new record for personal net worth by topping $211 billion.
Bezos, 57, gained $8.4 billion in net worth on Tuesday alone, according to the Bloomberg Billionaires Index, as Amazon stock soared 4.7 percent on the Pentagon's announcement that it is canceling the $10 billion JEDI contract with Microsoft.
It vaulted Bezos above the previous record of $210 billion, held briefly in January by Tesla CEO Elon Musk, who has seen his fortunes decline and now holds a mere $181 billion, putting him in distance second after Bezos.
While Tesla stock has declined nearly 10 percent so far this year, Amazon shares have continued to soar, adding 15.4 percent since January 1.
Amazon chairman Jeff Bezos, already the world's wealthiest man, has set a new record for personal net worth by topping $211 billion
Amazon stock soared 4.7 percent Friday on the Pentagon's announcement that it is canceling the $10 billion JEDI contract with Microsoft
Amazon's soaring shares have boosted the fortunes of Bezos, who on Monday stepped down as chief executive of Amazon, handing over the reins to his experienced lieutenant Andy Jassy.
Bezos now takes over the role of executive chairman at Amazon. He still owns about 51 million shares of Amazon stock, a position that makes up the vast majority of his wealth.
His gains on Tuesday broke the record for wealth since the Bloomberg index began tracking billionaire net worth in 2012, making Bezos the richest man in modern history.
Adjusted for inflation, historical figures such as the 19th Century's John D. Rockefeller (worth $350 billion in modern dollars) could be considered richer.
Deeper in history, some historical leaders controlled wealth that is nearly incalculable. Mongol warlord Genghis Khan, for example, had a peak net worth that is estimated in the hundreds of trillions of dollars.
Amazon stock rose sharply on Tuesday after the Pentagon canceled a contract with Microsoft that was forged under the Trump administration.
The contract has been on hold after Amazon filed a lawsuit challenging the decision under then-President Donald Trump, alleging that the former president exerted improper pressure on military officials to steer the contract away from Amazon.
Amazon argued that the deal was tainted by politics, particularly Trump's antagonism toward Bezos, who owns the Washington Post.
Amazon said in 2019 the Pentagon decision was full of 'egregious errors,' which it suggested were a result of 'improper pressure from Trump.'
The company cited a 2019 book that reported Trump had directed the Defense Department to 'screw Amazon' out of the JEDI contract.
The contract for cloud-computing service could eventually have been worth $10 billion for Microsoft.
Instead, the Pentagon will pursue a deal with both Microsoft and Amazon and possibly other cloud service providers.
Amazon argued that the Pentagon deal was tainted by politics, particularly Trump's antagonism toward Bezos, who owns the Washington Post
'With the shifting technology environment, it has become clear that the JEDI Cloud contract, which has long been delayed, no longer meets the requirements to fill the DoD´s capability gaps,' the Pentagon said in a statement.
Shares of Microsoft and Amazon both closed at a record high with the online retailer up 4.7 percent and shares of the software firm a penny higher.
Michael Pachter, an analyst with Wedbush Securities, said the absolute dollars involved - $10 billion over a decade - are at most a nice-to-have for the cloud companies, with AWS alone generating $45.3 billion in sales and $13.5 billion in operating profits for 2020.
The real value, he said, was in showcasing the security of the clouds, 'but it's not going to move the needle' for either company.
Ultimately, the cancellation and new contract could benefit Microsoft, Moerdler said, because the Redmond, Washington-based company has had nearly two years during the legal wrangling to invest in its technology.
'If there is now another competition, Microsoft is going in from a better position,' Moerdler said.
As recently as September the Defense Department re-evaluated the contract proposals and said Microsoft's submission was the best.
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Part of the Daily Mail, The Mail on Sunday & Metro Media Group
Read full article at Deadline
07 July, 2021 - 01:10am
The Defense Department said on Tuesday that it would not go forward with a lucrative cloud-computing contract that had become the subject of a contentious legal battle amid claims of interference by the Trump administration.
The Pentagon had warned Congress in January that it would walk away from the contract if a federal court agreed to consider whether former President Donald J. Trump interfered in a process that awarded the $10 billion contract to Microsoft over its tech rival Amazon, saying that the question would result in lengthy litigation and untenable delays.
The Defense Department said Tuesday in a news release that the contract for the Joint Enterprise Defense Infrastructure, known as JEDI, “no longer meets its needs,” but it would solicit bids from Amazon and Microsoft on future cloud-computing contracts.
A senior administration official said that soon after the Biden administration took office, it began a review that quickly concluded the lengthy arguments over JEDI had been so costly that the old architecture would be outdated as soon as it was deployed.
“With the shifting technology environment, it has become clear that the JEDI cloud contract, which has been long delayed, no longer meets the requirements to fill the DoD’s capability gaps,’’ the Pentagon said in an announcement.
Instead, the Pentagon proposed a new cloud architecture called the Joint Warfighter Cloud Capability. And the Pentagon made clear that only Microsoft and Amazon Web Services, which currently provides cloud services to the C.I.A., had the capacity to build the new architecture. The Pentagon’s announcement suggested that it would buy technology from both companies, rather than awarding one large contract to a single provider, as it had for JEDI.
Security concerns also played a role in the decision to seek cloud services from multiple companies, officials say. Recent breaches of cloud services have made it clear that there are vulnerabilities, and the Pentagon did not want to be dependent on one company for its technology.
The 10-year JEDI contract was awarded to Microsoft in 2019 after a fight among Amazon and other tech giants for the deal to modernize the military’s cloud-computing systems. Although some of the companies, including the business software company Oracle, lobbied for the Pentagon break the contract into pieces and award them to multiple suppliers, the Defense Department pressed forward with its plan to use a single cloud provider, believing that it would be the most seamless and secure approach.
Because of the size and security requirements of the JEDI contract, Amazon was widely considered the front-runner. But when the award fell to Microsoft, Amazon sued to block the contract, arguing that Microsoft did not have the technical capabilities to fulfill the military’s needs and that the process had been biased against Amazon because of Mr. Trump’s repeated criticisms of Amazon’s founder, Jeff Bezos, who also owns The Washington Post.
The Washington Post aggressively covered the Trump administration, and Mr. Trump referred to the newspaper as the “Amazon Washington Post” and accused it of spreading “fake news.”
Mr. Trump said other companies should be considered for the JEDI contract, and Amazon argued he used “improper pressure” to sway the Pentagon as it selected a technology vendor. An Amazon spokesman did not immediately respond to a request for comment.
The Defense Department said Mr. Trump had not played a role in the decision. Microsoft said that Amazon’s claims of bias lacked evidence and that it was prepared to provide the necessary technology to the military.
In April, a federal court said it could not dismiss the possibility the Mr. Trump had meddled in the process. The court’s ruling set the stage for the Pentagon to walk away from the contract.
“The D.O.D. faced a difficult choice: Continue with what could be a years-long litigation battle or find another path forward,” Toni Townes-Whitley, Microsoft’s president of U.S. regulated industries, wrote in a blog post responding to the decision. “We stand ready to support the D.O.D. as they work through their next steps and its new cloud computing solicitation plans.”
Much of the military operates on outdated computer systems, and the Defense Department has spent billions of dollars trying to modernize those systems while protecting classified material. The Defense Department has argued that the extensive delays surrounding the contract caused national security concerns.
This is a developing story. Check back for updates.
07 July, 2021 - 01:10am
The contract was coveted not for its dollar value as much as its prestige: Both companies for years have sought to persuade businesses and governments that it was safe to shift computing work into their data centers. Meeting all the security requirements of the U.S. military would have been a visible stamp of approval likely to sway other corporate and government clients, analysts said.
Seattle-based Amazon, the biggest cloud computing provider, was widely expected to win the contract. But when the Pentagon awarded the sole-source deal to Microsoft in 2019, the announcement gave “huge credibility” to Microsoft, which had been working hard to catch Amazon after a late start with cloud technology, said Mark Moerdler, a senior research analyst at Bernstein.
But the contract has been on hold after Amazon filed a lawsuit challenging the decision under then-President Donald Trump, alleging that the former president exerted improper pressure on military officials to steer the contract away from Amazon.
Trump publicly derided then-Amazon CEO Jeff Bezos and repeatedly criticized the company. Amazon said in 2019 the Pentagon decision was full of "egregious errors," which it suggested were a result of "improper pressure from Trump." The company cited a 2019 book that reported Trump had directed the Defense Department to "screw Amazon" reut.rs/2V4LqgQ out of the JEDI contract.
Shares of Microsoft and Amazon both closed at a record high with the online retailer up 4.7% and shares of the software firm a penny higher.
Michael Pachter, an analyst with Wedbush Securities, said the absolute dollars involved - $10 billion over a decade - are at most a nice-to-have for the cloud companies, with AWS alone generating $45.3 billion in sales and $13.5 billion in operating profits for 2020. The value, he said, was in showcasing the security of the clouds, “but it’s not going to move the needle” for either company.
But the cancellation and new contract could benefit Microsoft, Moerdler said, because the Redmond, Washington-based company has had nearly two years during the legal wrangling to invest in its technology.
“If there is now another competition, Microsoft is going in from a better position,” Moerdler said. As recently as September the Defense Department re-evaluated the contract proposals and said Microsoft’s submission was the best.
Other top cloud companies include Oracle Corp, Alphabet Inc’s Google and IBM Corp. Google and IBM on Tuesday said they were both interested in working with the federal government but stopped on short of saying whether they would enter the bidding process.
The Pentagon hopes to have the first awards by April 2022 for its new Joint Warfighter Cloud Capability (JWCC).
John Sherman, acting chief information officer for the Defense Department, said he expects both Microsoft and Amazon will get cloud contracts. He said the need was urgent.
“I’ve got to get this now -- as soon as possible -- starting hopefully as soon as April,” Sherman said.
Microsoft said in a statement the company was confident it will “continue to be successful as the DoD selects partners for new work”. Microsoft could submit a termination bid to recover costs of the scrapped project, Sherman said.
Amazon’s cloud unit Amazon Web Services (AWS) said it agreed with the Pentagon’s decision to cancel the contract. Amazon said the initial award was “not based on the merits of the proposals and instead was the result of outside influence that has no place in government procurement.” AWS added it looks “forward to continuing to support the DoD’s modernization efforts and building solutions that help accomplish their critical missions.”
In April a judge refused to dismiss Amazon’s claims alleging the Trump administration interfered in the Pentagon’s award to Microsoft after putting it on hold indefinitely in February 2020.
The now-cancelled Joint Enterprise Defense Infrastructure Cloud (JEDI) contract was budgeted for as much as $10 billion and was part of a broader digital modernization of the Pentagon aimed at making it more technologically agile.
“We don’t have an estimate yet, but I wouldn’t latch onto the $10 billion figure,” Sherman said, but added that the plan would likely involve a direct award for “urgently needed” capabilities and then a “full and open” competition for multiple suppliers by early 2025.
Republican Senator Chuck Grassley praised the Pentagon’s decision.
“The JEDI contract has been burdened by potential conflicts of interest, size, needless delays and its single awardee structure,” Grassley said, saying a fresh review process “will afford the program an opportunity for greater public trust and confidence.”
Reporting by Diane Bartz, David Shepardson and Doina Chiacu; Writing by Stephen Nellis; Editing by Chris Sanders and Lisa Shumaker
Our Standards: The Thomson Reuters Trust Principles.
06 July, 2021 - 07:19pm
Late in 2019, the Pentagon chose Microsoft for a $10 billion contract called JEDI that aimed to use the cloud to modernize US military computing infrastructure. Tuesday, the agency ripped up that deal. The Pentagon said it will start over with a new contract that will seek technology from both Amazon and Microsoft, and that offers better support to data-intensive projects, such as enhancing military decisionmaking with artificial intelligence.
The new contract will be called the Joint Warfighter Cloud Capability. It attempts to dodge a legal and political mess that had formed around JEDI. Microsoft competitors Amazon and Oracle both claimed in lawsuits that the award process had been skewed. In April, the Court of Federal Claims declined to dismiss Amazon’s suit alleging that bias against the company from President Trump and other officials had nudged the Pentagon to favor Microsoft, creating the potential for years of litigation.
The Pentagon announcement posted Tuesday didn’t mention JEDI’s legal troubles but said the US military’s technical needs had evolved since it first asked for bids on the original contract in 2018. JEDI included support for AI projects, but the Pentagon’s acting chief information officer, John Sherman, said in a statement that the department’s need for algorithm-heavy infrastructure had grown still further.
“Our landscape has advanced, and a new way ahead is warranted to achieve dominance in both traditional and nontraditional war-fighting domains,” Sherman said. He cited two recent AI-centric programs, suggesting that they would receive better support from the new contract and its two vendors.
One is called Joint All Domain Command and Control, which aims to link together data feeds from military systems across land, sea, air, and space so that algorithms can help commanders identify targets and choose among possible responses. In an Air Force exercise linked to the program last year, an airman used a VR headset and software from defense startup Anduril to order real air defenses to shoot down a mock cruise missile over White Sands Missile Range in New Mexico.
Sherman also suggested that JWCC would help a project announced last month to accelerate AI adoption across the Pentagon, including by creating special teams of data and AI experts for each of the agency’s 11 top military commands.
The Pentagon’s claim that it will better support advanced technology like AI projects shows President Biden’s Pentagon continuing an emphasis on the military potential of artificial intelligence that began during the Obama administration and continued under President Trump. Successive secretaries of defense have said tapping that potential will require better connections with tech industry firms, including cloud providers and startups. However, some AI experts fear more military AI could have unethical or deadly consequences, and some tech workers, including at Google, have protested Pentagon deals.
Andrew Hunter, director of the Defense-Industrial Initiatives Group at the Center for Strategic and International Studies, says the Pentagon appears to have decided that because of its legal tangles, a reboot was the most efficient way to get the cloud computing resources the department has needed for some time.
Computing-dependent projects like the one seeking to link various military services and hardware are central to the Pentagon’s strategy to face up to China. “The potential of cloud computing is to be able to apply sophisticated analytical techniques such as AI on your data so you can act with greater knowledge than adversaries,” Sherman says.
JEDI was not the Pentagon’s only cloud computing contract, but the speed with which its successor can get up and running could still have a significant effect on the Pentagon’s cloud and AI dreams. Had all gone to plan, the initial two-year phase of JEDI was to have been completed in April. Hunter expects the department to try to finalize the contract quickly—but also to take care to avoid a repeat of the controversy around JEDI.
Tuesday’s announcement said that only Amazon and Microsoft meet the Department of Defense’s requirements, which include stringent security rules, but that it was open to adding new vendors if any proved capable enough.
The Pentagon declined to provide more details on the new JWCC contract, but the two companies it said will be invited to take part offered positive, albeit muted, support to the reset.
In a blog post, Toni Townes-Whitley, Microsoft’s president for US regulated industries, said the company understood the Pentagon’s decision to cancel JEDI and avoid potentially years of litigation. “The security of the United States is more important than any single contract,” she wrote. “The DOD has a critical unmet need to bring the power of cloud and AI to our men and women in uniform, modernizing technology infrastructure and platform services technology.”
An Amazon spokesperson said in a statement that the company is committed to supporting the US military with the best technology and prices and that the original contract “was the result of outside influence that has no place in government procurement.” Oracle declined to comment.
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