Microsoft at record high on controversial Pentagon contract

Microsoft shares rose to an intraday record after the company scored a major victory in securing a milestone, $10 billion Pentagon contract for cloud computing services. But the contract — unthinkable for Microsoft even a year ago — will likely come at a cost, legal and internal.

Amazon.com, the market leader in cloud services, is considering a challenge to the award of the contract to Microsoft’s much smaller Azure business, citing President Donald Trump’s interference in the bidding process, according to a person familiar with the matter. Amazon had been widely considered the front-runner because of its superior size and previous cloud contract with the Central Intelligence Agency.

Meantime, Microsoft employees have protested involvement in the contract, known as the Joint Enterprise Defense Infrastructure, or JEDI, intended to bring U.S. military technology into the modern era.

“We are disheartened that Microsoft accepted the JEDI contract,” a group of employees wrote on Twitter. “As Microsoft workers, we are now complicit of ‘increasing the lethality’ of the U.S. Department of Defense.”

The group, calling itself Microsoft Workers 4 Good, was quoting a Defense Department official’s description of the contract’s goal.

Microsoft shares jumped as much as 3.5 percent as trading opened Monday in New York from a close of $140.73 on Friday. If maintained through the day, it will notch a new record.

Microsoft has said it will continue to pursue government and military work, despite objections from some employees. The company will also be involved in bids for a second large Defense contract that involves cloud-based email and collaboration software.

Microsoft says workers can request to be moved to other projects. But that is no simple matter in huge cloud efforts: Sales, marketing, engineering and data center operations can involve tens of thousands of workers.