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Microsoft wins $21.9 billion contract with US Army to supply augmented reality headsets

Over the past two years, Microsoft has worked with the Army to on the prototyping phase of what is called the Integrated Visual Augmentation System, or IVAS.

In this Oct. 21, 2020, photo provided by the U.S. Army, soldiers don a military prototype of the Army’s Integrated Visual Augmentation System (IVAS) and wield a Squad immersive Virtual Trainer (SiVT) during a training environment and test event at Fort Pickett, Va. Microsoft won a nearly $22 billion contract to supply U.S. Army combat troops with its virtual reality headsets. Microsoft and the Army separately announced the deal Wednesday, March 31, 2021. (Courtney Bacon/U.S. Army via AP) In this Oct. 21, 2020, photo provided by the U.S. Army, soldiers don a military prototype of the Army’s Integrated Visual Augmentation System (IVAS) and wield a Squad immersive Virtual Trainer (SiVT) during a training environment and test event at Fort Pickett, Va. Microsoft won a nearly $22 billion contract to supply U.S. Army combat troops with its virtual reality headsets. Microsoft and the Army separately announced the deal Wednesday, March 31, 2021. (Courtney Bacon/U.S. Army via AP)
In this Oct. 21, 2020, photo provided by the U.S. Army, soldiers don a military prototype of the Army’s Integrated Visual Augmentation System (IVAS) and wield a Squad immersive Virtual Trainer (SiVT) during a training environment and test event at Fort Pickett, Va. Microsoft won a nearly $22 billion contract to supply U.S. Army combat troops with its virtual reality headsets. Microsoft and the Army separately announced the deal Wednesday, March 31, 2021. (Courtney Bacon/U.S. Army via AP) (AP)

Microsoft Corp on Wednesday said it has won a deal to sell the U.S. Army augmented reality headsets based on its HoloLens product and backed by Azure cloud computing services.

The contract could be worth up to $21.88 billion over 10 years, a Microsoft spokesman told Reuters.

The company said Wednesday that the Army had moved into the production phase of the project.

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In a blog post, Microsoft Technical Fellow Alex Kipman said the headsets are designed to deliver "enhanced situational awareness, enabling information sharing and decision-making in a variety of scenarios."

The headsets will be manufactured in the United States, a Microsoft spokesman told Reuters.

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Microsoft was also in line to win the $10 billion JEDI cloud computing contract with the Pentagon, but the contract remains in dispute in a lawsuit filed by Amazon.com Inc. Pentagon officials told U.S. lawmakers in February that the Defense Department may jettison the contract if the dispute lingers in the courts.

After Microsoft announced a $480 million contract in 2018 to supply prototypes to the Army, at least 94 workers petitioned the company to cancel the deal and stop developing “any and all weapons technologies," Reuters reported at the time. A worker involved in that petition declined to comment Wednesday.

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