Microsoft Is Awarded U.S. Army Contract for AR Headsets For $21.9 billion

Microsoft has been awarded a contract by the U.S Army and has been charged to deliver over 120,000 devices based on its HoloLens augmented-reality headset. This deal which could be worth at least $21.88 billion over 10 years, comes after a contract the tech company Microsoft received to build prototype headsets for the U.S. Army and this also followed eighteen months after Microsoft won a cloud contract from the Pentagon that could be worth up to $10 billion.

The Pentagon revealed that Microsoft has been awarded a contract to build more than 120,000 custom HoloLens augmented-reality headsets for the U.S. Army and according to a Spokesperson from Microsoft, the contract could be worth up to $21.88 billion over 10 years. This information was provided to CNBC.

Following this announcement, Microsoft shares surged. This new contract won by Microsoft increases its already established reputation and proves that the company has transcended from operating systems and productivity software into futuristic technology based on its long-coming research, and can even generate revenue from its yet-to-be-made product(s).

In 2018, Microsoft was given a contract worth $480 million that entailed providing the Army with prototypes of the Integrated Visual Augmented System, or IVAS. The augmented-reality headsets contract therefore follows the 2018 contract; this deal will involve providing production versions.

The standard-issue HoloLens, which goes for about $3,500, makes it possible for people to see holograms overlaid over their actual environments and interact using hand and voice gestures. According to a CNBC reporter who tested an IVAS prototype in 2019, the device displayed a map and a compass and had thermal imaging to reveal people in the dark. The system could also show the aim for a weapon.

According to a blogpost written by Alex Kipman; one of Microsoft’s technical personnel who introduced the HoloLens in 2015, “The IVAS headset, based on HoloLens and augmented by Microsoft Azure cloud services, delivers a platform that will keep soldiers safer and make them more effective”. He assured that “the program delivers enhanced situational awareness, enabling information sharing and decision-making in a variety of scenarios”.

The U.S. Army and Pentagon did not immediately respond to requests for comment but said in a statement that the headset allows soldiers to fight, rehearse and train in one system.

The series of contracts that Microsoft has received from the U.S Army cements its position as one of the Army’s technology suppliers.

Microsoft also recently announced that it is reopening it’s headquarters and will allow some employees back into their offices.