The Pentagon is scrapping a multibillion dollar cloud computing contract, which sparked a row between Microsoft and Amazon.
The US Department of Defense said the $10bn contract no longer met its current needs due to the “shifting technology environment”.
Microsoft was awarded the contract, but Amazon claimed President Trump had influenced the decision.
Amazon and Microsoft will both have the opportunity to bid for a new contract.
After Microsoft won the massive Joint Enterprise Defense Infrastructure (Jedi) contract, it drew complaints and a legal challenge from tech rival Amazon, which claimed that the choice was politically motivated.
The Department of Defense (DoD) said in a statement on Tuesday: “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.”