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The federal judge's order is seen as a win for Amazon, which sued the U.S. government last year for awarding the contract to its rival.
Amazon filed the suit in November, alleging President Trump's bias against the company hurt its chances to win the project.
Amazon was considered an early front-runner for the contract.
The project, known as Joint Enterprise Defense Infrastructure, or JEDI, will store and process vast amounts of classified data.
It's intended to improve the Pentagon's communications with soldiers on the battlefield and would use artificial intelligence to speed up its war planning and fighting capabilities.
Pentagon spokesman Lt. Col. Robert Carver said in a statement that the department was disappointed in the ruling that delayed changes “and deprived our warfighters of a set of capabilities they urgently need.” But he said the Pentagon remained sure of its decision to choose Microsoft.
Microsoft echoed the disappointment in a statement Thursday, but said it believes that it will ultimately be allowed to move forward with the project.
Amazon did not immediately respond to a request for comment.
Earlier this week, Amazon asked to question Trump for its case. In July, Trump publicly stated that other companies told him the contract “wasn’t competitively bid,” and he said the administration would “take a very long look” at it.
Amazon CEO Jeff Bezos has long been a target of Trump; the president calls the Bezos-owned Washington Post “fake news" whenever it publishes unfavorable stories about him.
Microsoft opposed Amazon's request for depositions in a court filing this week, arguing that Amazon "is grasping at straws to find support for its baseless allegations."
Amazon asked the court to halt work on the project last month. Both the documents requesting the work stoppage and the judge's decision Thursday to issue the temporary injunction are sealed by the court.
A public court notice, however, confirmed the injunction on the Pentagon and noted that Amazon will have to establish a security fund of $42 million that will be used to pay damages if the court later finds the injunction was improper.
No further details of the decision were immediately available.
The Associated Press contributed to this article.