By Matt O'Brien

Microsoft won a nearly $22 billion contract to supply U.S. Army combat troops with its augmented reality headsets.

Microsoft and the Army separately announced the deal Wednesday.

The technology is based on Microsoft's HoloLens headsets, which were originally intended for the video game and entertainment industries.

Pentagon officials have described the futuristic technology — which the Army calls its Integrated Visual Augmentation System — as a way of boosting soldiers' awareness of their surroundings and their ability to spot targets and dangers.

Microsoft’s head-mounted HoloLens displays let people see virtual imagery superimposed over the physical world in front of them — anything from holograms in virtual game worlds to repair instructions floating over a broken gadget. Users can control what they see using hand gestures or voice commands.

The Army's website says soldiers tested the gadgets last year at Fort Pickett in Virginia. It said the system could help troops gain an advantage “on battlefields that are increasingly urban, congested, dark and unpredictable.”

The Army first began testing Microsoft's system with a $480 million contract in 2018 and said the headsets could be used for both training and in actual battle. The new contract will enable Microsoft to mass produce units for more than 120,000 soldiers in the Army Close Combat Force. Microsoft said the contract will amount to up to $21.88 billion over the next decade, with a five-year base agreement that can be extended for another five years.

Microsoft President Brad Smith told the Senate Armed Services Committee in February that the system could integrate thermal night vision and facial recognition to provide soldiers with “real-time analytics” on remote battlefields. He also described how it could help in planning a hostage rescue operation by creating a “digital twin” of the building.

A group of Microsoft workers in 2019 petitioned the company to cancel its initial Army deal, arguing it would turn real-world battlefields into a video game.

Microsoft is among several tech companies that have sought to wow the gaming world with glitzy new virtual reality goggles over the past decade, though the efforts have largely fizzled. Microsoft pivoted away from consumer applications for its second-generation HoloLens 2, introduced in 2019, which is the basis for the Army's new gadgets.

Although Microsoft recently demonstrated a way to use the goggles to play the hit game Pokemon Go, it mostly pitches the devices as work tools to help surgeons, factory crews and others.

The headset deal is part of Microsoft's broader work as a defense contractor. The Pentagon in September reaffirmed Microsoft as winner of a cloud computing contract potentially worth $10 billion, although the work has been delayed by a legal battle over rival Amazon’s claim that the bidding process was flawed.

Share:
More In Business
Michigan Judge Sentences Walmart Shoplifters to Wash Parking Lot Cars
A Michigan judge is putting sponges in the hands of shoplifters and ordering them to wash cars in a Walmart parking lot when spring weather arrives. Genesee County Judge Jeffrey Clothier hopes the unusual form of community service discourages people from stealing from Walmart. The judge also wants to reward shoppers with free car washes. Clothier says he began ordering “Walmart wash” sentences this week for shoplifting at the store in Grand Blanc Township. He believes 75 to 100 people eventually will be ordered to wash cars this spring. Clothier says he will be washing cars alongside them when the time comes.
State Department Halts Plan to buy $400M of Armored Tesla Vehicles
The State Department had been in talks with Elon Musk’s Tesla company to buy armored electric vehicles, but the plans have been put on hold by the Trump administration after reports emerged about a potential $400 million purchase. A State Department spokesperson said the electric car company owned by Musk was the only one that expressed interest back in May 2024. The deal with Tesla was only in its planning phases but it was forecast to be the largest contract of the year. It shows how some of his wealth has come and was still expected to come from taxpayers.
Goodyear Blimp at 100: ‘Floating Piece of Americana’ Still Thriving
At 100 years old, the Goodyear Blimp is an ageless star in the sky. The 246-foot-long airship will be in the background of the Daytona 500 — flying roughly 1,500 feet above Daytona International Speedway, actually — to celebrate its greatest anniversary tour. Even though remote camera technologies are improving regularly and changing the landscape of aerial footage, the blimp continues to carve out a niche. At Daytona, with the usual 40-car field racing around a 2½-mile superspeedway, views from the blimp aptly provide the scope of the event.
Is U.S. Restaurants’ Breakfast Boom Contributing to High Egg Prices?
It’s a chicken-and-egg problem: Restaurants are struggling with record-high U.S. egg prices, but their omelets, scrambles and huevos rancheros may be part of the problem. Breakfast is booming at U.S. eateries. First Watch, a restaurant chain that serves breakfast, brunch and lunch, nearly quadrupled its locations over the past decade to 570. Fast-food chains like Starbucks and Wendy's added more egg-filled breakfast items. In normal times, egg producers could meet the demand. But a bird flu outbreak that has forced them to slaughter their flocks is making supplies scarcer and pushing up prices. Some restaurants like Waffle House have added a surcharge to offset their costs.
Load More