On April 3, President Donald Trump sat down to a private dinner with some close associates, including Peter Thiel, his most loyal supporter in Silicon Valley. Thiel had brought Safra Catz, the co-CEO of Oracle, along to discuss a $10 billion Department of Defense contract to build the Joint Enterprise Defense Infrastructure, or JEDI, a cloud computing platform that will eventually run much of the Pentagon’s digital infrastructure—from data storage to image analytics to the translation of intercepted phone calls. According to Bloomberg News, Catz objected to the DOD’s plan to award the entire JEDI contract to a single organization, rather than parceling it out to multiple contractors. Oracle, Microsoft, and IBM were all bidding, but Amazon, Catz said, with its massive cloud services business, had an unfair advantage. (Trump, in a rare display of restraint, reportedly said he wanted to ensure a fair competition but went no further.)
JEDI plays a significant part in the Pentagon’s strategy to ensure that its war-waging capabilities keep pace with technological change, and Amazon is probably best positioned to build it. The company’s web services division (AWS), officially founded in 2006, grew out of a project hatched by two of its employees, Benjamin Black and Chris Pinkham, to use Amazon’s growing resources to provide technical infrastructure to anyone who might want it—whether a retailer selling their wares through Amazon’s platform or someone starting a new company. The initial product, called EC2, helped Amazon launch an entirely new industry, broadly called cloud computing but encompassing a range of services, including data storage, analytics, machine learning, and other tools. While Amazon’s vaunted retail business frequently lost money over the last decade, AWS has been one of its most reliably profitable divisions, bringing in $5.4 billion in revenue in the first quarter of 2018.
Microsoft, Google, and others eventually started their own cloud computing divisions. But as the competition over JEDI shows, the desire to challenge AWS has led major technology firms into the national security complex, with promises to analyze imagery for drone strikes and to run communications links for soldiers fighting in the Middle East and North Africa. As these companies move into military work, their claims about the benevolent role that technology can play in modern society—already damaged by scandals ranging from Uber’s labor exploitation to Facebook’s electoral mismanagement—are running squarely up against the realities of their profit motive.
In truth, government and the technology industry have always been partners. Some companies, like IBM, have relationships with the military that extend back to World War II. The development of the early internet owes much to resources provided by the Pentagon’s advanced research division, an agency founded in 1958 to counter Soviet expansion into space. Later, during the Cold War, microchips developed by industry pioneers like Fairchild Semiconductor found their way into ballistic missiles. Even Stanford University’s rise as an engineering and entrepreneurial powerhouse depended heavily on millions of dollars in government funding for high-tech research (a relationship that became controversial during the Vietnam War).