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Microsoft and Map Quest currently have not updated or announced anything on their offerings.
Was there some sort of actual geographic decision or is this all just bowing to the powers that be for no apparent reason?

This some sort of rich guy purity test?

Do we do this in schools next?

Yes and no. Google, Apple, et al are just using the official names in the GNIS. So while the decision from the powers that be was insanely arbitrary, in the case of the mapmakers this is far from their first rodeo when it comes to conflicted place names.
That may explain it, but it doesn't excuse Big Tech's willingness to go along with this absurdity.
Stupid as the change is, it's not their stupidity. Should the tech companies really override the USGS and decide for themselves what things ought to be called? That seems like a messy precedent.
I don't think it's "deciding for themselves" to choose to use a name that is authenticated by centuries of history and use.

The USGS should be a record of how things are named, like a dictionary is a record of what words mean, not a political organ for disseminating newspeak.

What should Tim Cook call himself if, say, a little DOGE-ie gets into the Passport or IRS or SEC systems and actually changes all Tim Cook references to Tim Apple?
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Unfortunately, this is just the beginning, only those not versed in history aren't seeing where this administration is going to.
Shouldn't New Mexico also be renamed New America?
And while we are at it: Rio Grande shall be Big River and Rio Negro, Black River. Also El Paso shall get an Amerrican name. /s
I understand why they rename it for us users, but why globally?
I'm a bit conflicted. We consistently hear Americans being told that it isn't proper to call them Americans because America is composed of more countries than the US. If that is a valid argument, then there is no reason why we shouldn't be more inclusive on the naming of the Gulf.

On the other hand, I'm not a big fan of renaming places.

This sort of history doctoring would be harder with a blockchain.