The US Department of Defense (DoD) has cancelled its $10 billion (£7.25bn) Joint Enterprise Defense Infrastructure (JEDI) project and scrapped its Trump-backed contract with Microsoft.

The deal had been long challenged by Microsoft’s cloud rival Amazon Web Services (AWS), which alleged that then-president Donald Trump had influenced the DoD by ordering them to “screw Amazon”, thus unfairly affecting the outcome of the bidding process.

Earlier this year, the Pentagon hinted that it might scrap JEDI altogether, with Deputy Defense Secretary Kathleen Hicks saying the DoD would have to consider the project in the context of Amazon’s litigation.

However, on Tuesday, acting DoD CIO John Sherman said that the decision was due to the Pentagon’s changing needs:

“JEDI was developed at a time when the Department’s needs were different and both the CSPs technology and our cloud conversancy was less mature. In light of new initiatives like JADC2 and AI and Data Acceleration (ADA), the evolution of the cloud ecosystem within DoD, and changes in user requirements to leverage multiple cloud environments to execute mission, our landscape has advanced and a new way-ahead is warranted to achieve dominance in both traditional and non-traditional warfighting domains,” he said.

As a replacement for JEDI, the DoD announced a new project, known as the Joint Warfighter Cloud Capability (JWCC), which is to be “a multi-cloud/multi-vendor Indefinite Delivery-Indefinite Quantity (IDIQ) contract” that will consider both AWS and Microsoft.

“The Department intends to seek proposals from a limited number of sources, namely the Microsoft Corporation (Microsoft) and Amazon Web Services (AWS), as available market research indicates that these two vendors are the only Cloud Service Providers (CSPs) capable of meeting the Department’s requirements,” said the DoD.

The first awards are expected to be announced by April 2022, according to Sherman, who wouldn’t provide an estimated value “yet”.

“I wouldn’t latch onto the $10 billion figure,” he added.

Commenting on the news, Microsoft’s president of US Regulated Industries, Toni Townes-Whitley, said that the tech giant is “confident” that it will “continue to be successful as the DoD selects partners for new work”.

Meanwhile, AWS, headed by new CEO Adam Selipsky, told Reuters that it looks “forward to continuing to support the DoD’s modernisation efforts and building solutions that help accomplish their critical missions”.