Microsoft Wins $22 Billion Army Contract for HoloLens 2 Headsets

The Potential of AR/VR in Military Applications

A significant application for Augmented Reality (AR) and Virtual Reality (VR) technologies may ultimately be found within the realm of warfare.

Microsoft's Contract with the U.S. Army

Recently, Microsoft revealed it has secured a contract to provide the United States Army with a substantial number of augmented reality headsets. These headsets are built upon the foundation of the company’s HoloLens technology.

The potential value of this contract extends to $21.88 billion over a decade, according to Microsoft’s announcement.

IVAS Headset Deployment

Microsoft is tasked with delivering 120,000 AR headsets to the Army. These are based on the Integrated Visual Augmentation System (IVAS), a design specifically adapted to meet the requirements of soldiers operating in the field.

The IVAS design represents an upgrade to the existing HoloLens 2, enhancing its functionality for military use.

Enhanced Situational Awareness

“The program is designed to deliver improved situational awareness, facilitating information sharing and more effective decision-making across diverse operational environments,” stated Alex Kipman in a Microsoft blog post.

Building on Previous Investments

This current contract expands upon a prior $480 million agreement Microsoft secured in 2018. This initial contract involved equipping the U.S. Army with augmented reality technology.

At that time, the agreement included the possibility of subsequent orders exceeding 100,000 headsets. A Microsoft spokesperson commented that the technology would empower troops with enhanced information for improved decision-making, and strengthen their relationship with the Department of Defense.

Transition to Full-Scale Production

Microsoft indicates that this announcement signifies a shift from prototyping to the actual production and deployment of these systems.

Implications for AR Technology

This represents a considerable expansion for augmented reality technology, which has seen limited large-scale implementations. It provides Microsoft with substantial funding to address fundamental technological challenges.

Solutions developed through this government contract could potentially be adapted for use in consumer and enterprise-level devices in the future.

A Unique Position in the Industry

While many major companies in the augmented reality sector have expressed reluctance or outright opposition to accepting military contracts, Microsoft has actively pursued these opportunities.