Microsoft scores U.S. Army contract to produce augmented reality headsets

What you need to know

• Microsoft has won a contract to produce augmented reality helmets for the U.S. Army.
• The contract could net Microsoft up to $21.88 billion over 10 years.
• This is the latest in a series of contracts Microsoft has signed on for with the U.S. military.

Update: Microsoft has also confirmed and published the news themselves.

According to CNBC, The Pentagon has announced Microsoft as the winner of a contract that will task the tech giant with constructing more than 120,000 augmented reality headsets for the U.S. Army. A Microsoft spokesperson who spoke with CNBC stated the contract could be worth up to $21.88 billion over ten years.

The augmented reality headsets in question are modified versions of Microsoft's consumer and business-friendly HoloLens headsets. While the standard HoloLens headsets overlay real-life environments with holographic imagery, the military variants add a map, compass, and thermal imaging capabilities, as well as the ability to project the aim of weapons. The Army-ordered HoloLens model is referred to as the Integrated Audio Visual System (IVAS).

This new contract isn't a complete surprise given that Microsoft was tasked with developing and delivering prototype military augmented reality headsets in 2018, as reported by Bloomberg. Said prototype contract caused backlash within Microsoft, as employees cited ethical concerns over using the HoloLens technology for military purposes. However, Microsoft forged ahead with the deal, thereby paving the way for today's news.

These aren't the only deals Microsoft has struck with the U.S. government's military-focused branches. In 2019, Microsoft won the Joint Enterprise Defense Infrastructure (JEDI) contract to provide cloud services for the U.S. Department of Defense. Microsoft engaged in quite the fight with Amazon for the contract but ultimately secured it. That deal has the potential to be worth $10 billion over the course of ten years. Another contract named Defense Enterprise Office Solutions, or DEOS, which is worth $7.6 billion was also awarded to General Dynamics Corp to deploy Microsoft Teams to the DOD.