The US Department of Defence (DoD) has cancelled its $10 billion (£7.2bn) cloud computing contract with Microsoft, pitting it back against Amazon for a renewed bidding war over the rights to develop the Pentagon’s long awaited cloud system.

The cancellation follows Amazon’s filing of a lawsuit against the decision to award the ‘Jedi’ contract to Microsoft in late 2019, a decision which it claims was improperly influenced by political pressure from then President...