Microsoft Wins $21.9 Billion Contract to Supply AR Headsets to the US Army

Microsoft has won a contract with the US Army to provide augmented reality headsets suitable for battlefield conditions. The Integrated Visual Augmentation System (IVAS) will be derived from Microsoft’s HoloLens technology and augmented by a backend built on Microsoft Azure.

This deal builds on a previous $480M agreement between Microsoft and the Army, and the $21.9 billion figure represents a best-case result if Microsoft delivers all its relevant objectives and the Army decides to renew. The IVAS program will be reviewed five years from now to determine whether to continue the project.

The Army’s announcement earlier this week contains more details on what IVAS is intended to accomplish:

The IVAS aggregates multiple technologies into an architecture that allows the Soldier to Fight, Rehearse, and Train using a single platform. The suite of capabilities leverages existing high-resolution night, thermal, and Soldier-borne sensors integrated into a unified Heads Up Display to provide the improved situational awareness, target engagement, and informed decision-making necessary to achieve overmatch against current and future adversaries. The system also leverages augmented reality and machine learning to enable a life-like mixed reality training environment so the CCF can rehearse before engaging any adversaries.

You can see the camera array in our feature image above. The contract is for 120,000 IVAS headsets over a decade. It’s not clear how much of that $21.9B is actually for the IVAS hardware; Microsoft’s previous agreement with the Army delivered 50,000 prototype headsets and was valued at $480M. The prototype hardware looked fragile, whereas the helmet-mounted system appears far more robust.

Neither Microsoft nor the Army is saying much about what the IVAS can do, but the company spoke more freely back in 2018. At the time, IVAS’s stated mission was to “increase lethality by enhancing the ability to detect, decide, and engage before the enemy.” There was an internal protest by some Microsoft employees calling on the company to step back from the project, but CEO Satya Nadella overruled such concerns, saying: “We made a principled decision that we’re not going to withhold technology from institutions that we have elected in democracies to protect the freedoms we enjoy.” The Army announcement today references training environments but makes no mention of field deployment.

The idea of a helmet with baked-in multi-spectral imaging sounds more like science fiction than reality, but the models Microsoft is showing off today look far more capable than what the company was building in 2015.

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