Microsoft Loses $17 Billion In 5 Minutes Due To Amazon’s Appeal Against A Major Govt Contract
Amazon and Microsoft are industry giants among cloud services providers.
Amazon, which was the preferential winner in the cloud computing deal, sued the US Defense Department when they gave the contract to arch-rival Microsoft instead last year.
Amazon has accused officials of bowing to pressure from Donald Trump.
Read to find out more…
What the fuss is all about?
Last year, to everyone’s surprise Microsoft won the cloud-computing contract over Amazon!
Amazon sued the Pentagon, accusing the agency of “clear deficiencies, errors, and unmistakable bias” against the company. Amazon pressed a lawsuit stating the process being stained by politics.
A federal judge has issued an order temporarily halting the multibillion-dollar cloud computing contract that the US military was awarding to Microsoft.
On February 13, 2020, Judge Patricia Campbell-Smith of the US Federal Claims Court agreed to the first demand, hence ordering the US to halt its Jedi activities. The Judge has also ordered Amazon to set aside $42m for costs if future proceedings found she was wrong to have issued the ruling.
The contract in question, known as Jedi, which is worth up to $10 billion over 10 years and is aimed at making the US Defence Department more technologically agile.
In seeking the ruling the firm had said it was “important that the numerous evaluation errors and blatant political interference that impacted the Jedi award decision be reviewed”.
The Defense Department has denied any claims of discrimination. Though it is not the first time a firm has accused Mr Trump of improperly shaking the federal government’s decision-making due to his objections regarding media coverage. The company is seeking a testimony from Mr Trump as part of the lawsuit.
The US president has often attacked Amazon and boss Jeff Bezos, who also owns the Washington Post newspaper.
Microsoft Market Value in Danger?
Microsoft shares declined sharply on February, 13 afternoon immediately after the ruling by the federal judge.
The technology leader lost $17 billion from $17 billion from its market capitalization in just five minutes. The stock bottomed out with a 1% loss shortly thereafter. According to Bloomberg Data, Microsoft’s market value is $1.4 trillion.
Shares of Amazon shot up briefly following the announcement on Thursday, but then turned negative.