Microsoft Secures $480 Million U.S. Army HoloLens Contract

Microsoft Secures $480 Million U.S. Army HoloLens Contract

The terms of the contract could see the US military deploying 100,000 of the company's AR headsets. It's not clear if Microsoft will get the same kind of pushback on the contract to supply Hololens units, which will be used in live combat.

The new contract will continue Microsoft's relationship with the Department of Defense.

HoloLens is an augmented reality headset that overlays virtual objects and information over the real world. Only about 50,000 HoloLens units have been sold so far worldwide, according to a recent Microsoft video, a fact that underlines the huge size of this contract.

The Integrated Visual Augmentation System (IVAS) the company is working on was previously known as the Heads Up Display (HUD) 3.0 and is meant as a way to offer soldiers on the battlefield (as well as those in training) an increase in "lethality, mobility, and situational awareness". HoloLens is aimed more at developers and enterprise users rather than consumers.

The Army would also like to incorporate night vision and thermal sensing into upcoming HoloLens headsets.

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While the headline deal is advertised for 100,000 headsets, the initial order is only for 2500 to be delivered within 2 years, with the capacity for mass production in the future.

The contract went though a bidding process created to encourage the Army to do business with companies who aren't traditional defense contractors. In early August, the Army held meetings with 25 companies interested in participating in some way, including Booz Allen Hamilton Holding Corp., Lockheed Martin Corp., and Raytheon Co.

Microsoft and many other Seattle and Silicon Valley companies have been running into opposition from employees to dealing with the US Military over humanitarian concerns. President and Chief Legal Officer Brad Smith wrote last month that employees with ethical concerns would be allowed to switch projects.

"Artificial intelligence, augmented reality and other technologies are raising new and profoundly important issues, including the ability of weapons to act autonomously".

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