Microsoft confirmed to dump $22 billion IVAS HoloLens project onto military tech firm via new partnership

IVAS headset based on Microsoft HoloLens
The IVAS headset worn by a soldier. (Image credit: U.S. Army)

Microsoft has confirmed that it is seeking to hand-off development and production of its military IVAS hardware and software to a third-party via a new partnership with Anduril Industries, an American defence technology company.

The news comes as Microsoft essentially washes its hands of all first-party Mixed Reality efforts. In the last year, the company has retired its Windows Mixed Reality platform and ended production on HoloLens 2. In 2022, the company outright canceled the HoloLens 3.

Microsoft's corporate vice president of Mixed Reality, Robin Seiler said in a blog post “We are incredibly proud of the work our teams have put in to help the U.S. Army transform its concept of a soldier-borne, AR headset into reality with the IVAS program. Our Soldier-Centered Design approach helped reimagine technology development with the Army that continuously took in real-world soldier feedback to develop a product that soldiers love. We are excited to partner with Anduril for the next phase of IVAS and leverage our combined strengths to meet our commitments on this vital program and deliver a game-changing capability for every U.S. soldier.”

IVAS was a specialized version of HoloLens 2 designed for the United States military. Microsoft was awarded a $22 billion contract in 2021 to deliver an augmented reality device for U.S. soldiers, but the project has faced many issues throughout development. The current iteration of IVAS is version 1.2, which addresses key issues and concerns from soldiers who had provided feedback on earlier iterations of the hardware.

As part of this partnership, Anduril Industries will use Microsoft Azure as its preferred hyperscale cloud for all workloads related to the IVAS project and Anduril AI technology. Anduril Industries' founder, Palmer Luckey said "The ultimate goal is to create a military ecosystem where technology acts as an extension of human capability. By empowering soldiers with the tools they need to make faster, smarter decisions, we’re building a future where technology and human ingenuity combine to ensure mission success.”

Should the partnership be approved, this will mark the end of a Microsoft-made augmented reality device for the military, with Anduril Industries taking over design, development, and production of the hardware and software. The partnership will need to be approved by the U.S. Department of Defence before it can proceed.

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Zac Bowden
Senior Editor

Zac Bowden is a Senior Editor at Windows Central. Bringing you exclusive coverage into the world of Windows on PCs, tablets, phones, and more. Also an avid collector of rare Microsoft prototype devices! Keep in touch on Twitter and Threads

  • fjtorres5591
    Makes sense for this particular product.

    The rules of military procurement and *support* are very different from either enterprise or consumer spaces. And if MS is pivoting from AR to AI it is probsbly because they don't feel comfortable playing in two "blue sky" projects simultaneously. Especially with generative software's much bigger margins that play to their Data Center strengths.

    Anduril, btw, is neither a small startup nor an old-school defense player but rather an up and comer that is disrupting the military market in ways similar to Tesla and SpaceX in their markets...
    ...and XBOX in gaming...
    ...by ignoring the "way its always been done" and bringing in silivalley ways of problem solving. To appreciate Anduril's approach, look up "BARACUDA MISSILES" a family of cheap but advanced missiles designed for quick high volume manufacturing. Hopefully their products won't be needed but if worse comes to worse, they will be in high demand.

    One last thought: "dump" might not be the appropriate term for this deal.
    It depends on what MS gets out of it, whether a significant lump sum, equity, royalties, or nothing. That the deal requires approval suggests MS is getting something more than just another big customer for AZURE so "hand-off" might be a better choice of words than the headline uses.

    I suspect stockholders will be happy to see MS is not trying to be all things to all people, a generally fatal temptation for large conglomerates looking for growth.

    Interesting development, considering the history of the contract.
    Reply