© Provided by CNBC LLC Satya Nadella, CEO of Microsoft, smiles at a meeting of the Economic Club of Washington in Washington, D.C., on Oct. 4, 2017.

Microsoft has emerged victorious in a dramatic competition for public cloud resources for the U.S. Defense Department, beating out market leader Amazon Web Services, the Pentagon said on Friday. The contract could be worth as much as $10 billion over a decade, according to a statement.

The achievement highlights the emergence of Microsoft's Azure cloud as a challenger to AWS. Microsoft has also won major deals from companies like Walmart even as AWS has kept growing.

Other, smaller cloud rivals like IBM and Oracle were kicked out earlier in the process, which has been contentious.

In July President Trump said he was looking at the contract after companies had protested the contract. Then Defense Secretary Mark Esper said that he would look at it.

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