Amazon’s Jeff Bezos is at it again with his crony capitalist deals — this time for a ten-year cloud computing contract with the Department of Defense worth over $10 billion.
While crony capitalism is something we should be concerned about as conservatives, the national security implications of this deal are even more alarming. If the Department of Defense moves ahead with this deal, it would harm national security and destroy competition for government-wide cloud computing services.
Amazon’s global reach has landed them in bed with Beijing, where the communist government requires that companies sell source code and computer equipment to Chinese government enterprises, primarily Beijing Sinnet Technology Co. China has a longstanding tradition of using these laws to steal trade secrets from major American corporations.
When our president said that we were getting “bad deals” and were being “ripped off” by China, he didn’t just mean in trade. China is literally stealing American technology, and they’re getting away with it.
As of 2009, U.S. firms were losing $48 billion per year due to these state-mandated practices, largely in highly valuable source code. If the Chinese can’t make it themselves, they copy it, or they steal it.
Amazon’s cloud computing source code is highly valuable; they are the largest cloud infrastructure service provider. That business segment is worth nearly double the value of their closest competitor.
Cloud computing is a relatively new market that Amazon pioneered, and it’s unsurprising that they are currently the market leader. However, there are a number of other large corporations that are more than capable of handling a contract of this size.
Microsoft, IBM, and Google are all looking to compete in this space, and have made sizable investments in their infrastructure. By awarding this contract to Amazon exclusively, the market will be significantly tilted in Amazon’s favor because of the favoritism they are being shown by Jeff Bezos’ Washington cronies.
If they simply provided services to companies such as Netflix, Airbnb, and Comcast, then Bezos and his management team would be free to let the Chinese steal their technology at their own peril. However, when you already provide services to the CIA and a host of other government agencies, an approach like this is nothing short of unacceptable.
This means that Amazon is one of the biggest targets in the industry for hackers, and if the Department of Defense awards them this contract, Amazon will be in control of the most valuable data on the planet.
Amazon has the fastest growing lobbying machine of the large tech companies, and Bezos has shown that he is going to make lobbying Washington, D.C. elites a top priority by buying and renovating the largest private estate in Washington, D.C. This lobbying arm has helped him to get access to high-level administration officials including Secretary of Defense James Mattis, who is known to receive advice directly from Jeff Bezos.
Despite the fact that this contract has yet to be awarded officially, the Department of Defense is already acting as if it will be awarded to Amazon. They have already given a $950 million contract to REAN Cloud LLC to migrate Department of Defense data to the cloud. It just so happens that REAN Cloud LLC is an Amazon partner.
Secretary Mattis and the Trump administration would be wise to reject this contract in favor of one that favors free markets and national security. The American people, and the American military, deserve better.