After four years into a 10-year, $21.9 billion contract with the U.S. Army to produce 120,000 mixed-reality goggles for ground troops, Microsoft is handing off production oversight to Anduril Industries. The goggles, based on Microsoft’s HoloLens technology, are designed to enhance soldiers’ situational awareness and give them some high-tech advantages on the battlefield.
The transition was announced in a joint press release from Microsoft and Anduril on February 11, 2025. “Through this partnership agreement, and pending Department of Defense approval, Anduril will assume oversight of production, future development of hardware and software, and delivery timelines,” the companies said.
The U.S. Army first awarded Microsoft a $280 million contract in 2018 to adapt its HoloLens virtual reality technology, which relies on the Integrated Visual Augmentation System (IVAS), and build a battlefield-ready prototype. According to Microsoft, operational goggles would allow soldiers to see through smoke and around corners, and to use holographic imagery for training; and they could have 3D terrain maps projected onto their field of vision at the click of a button. The goggles would also sync with the soldier’s firearm and drones and robots.
On March 26, 2021, the U.S. Army awarded Microsoft the $21.9 billion contract to produce the goggles. Since then, the project has been plagued by delays. Soldiers testing the goggles reported discomfort, citing headaches and nausea, and that the devices were too bulky and hampered range of vision. On April 22, 2022, the Department of Defense Office of Inspector General released an audit of the IVAS program, warning that “procuring IVAS without attaining user acceptance could result in wasting up to $21.88 billion in taxpayer funds to field a system that soldiers may not want to use or use as intended.”
As Microsoft worked to address the setbacks, it also faced internal resistance. Many employees opposed the company’s involvement in developing an apparatus for combat use.
Under the contract realignment, Microsoft Azure would remain the “preferred hyper scale cloud for all workloads related to IVAS and Anduril AI technologies.”
“As warfare grows more complex, the need for intuitive, information-rich tools becomes increasingly urgent. Traditional mission command systems — that rely on flat maps, static dashboards and verbal communication — are ill-suited to the dynamic nature of modern battlefields. The IVAS program represents a groundbreaking step forward in military technology, providing soldiers with a comprehensive, body-worn system that integrates advanced augmented reality (AR) and virtual reality (VR) to give warfighters beyond line-of-sight perception capabilities, increasing combat effectiveness, survivability against drones, and accelerating mission command of unmanned systems.”
Palmer Luckey is the founder of Anduril. In 2012, he launched Oculus VR and sold it two years later to Facebook for $2 billion. Five years after that, in 2017, he founded Anduril. In the press release, Mr. Luckey stated, “The IVAS program represents the future of mission command, combining technology and human capability to give soldiers the edge they need on the battlefield. 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.”
On his personal blog, Mr. Luckey had a lot to say about his company’s newest responsibility. He titled the blog, “Turning Soldiers into Superheroes.”
“As of today, Anduril Industries is taking the reins of the largest project of its kind in history: The United States Army’s Integrated Visual Augmentation System (IVAS) program. For me, this announcement is deeply personal. Since my pre-Oculus days as a teenager who had the opportunity to do a tiny bit of work on the Army’s BRAVEMIND project, I’ve believed there would be a headset on every soldier long before there is a headset on every civilian.”
Mr. Luckey added, “The IVAS program – one of the most important programs to the Army – represents just the beginnings of a new path in human augmentation, one that will allow America’s warfighters to surpass the limitations of human form and cognition, seamlessly teaming enhanced humans with large packs of robotic and biologic teammates.”
He went on to say that the project would be something akin to what Robert Heinlein’s 1959 novel Starship Troopers portrayed. That novel was adapted into the 1997 sci-fi action movie with the same title.
In 2019, the U.S. Army invited Microsoft engineers to a military base in North Carolina for a series of week-long bootcamps, so that the engineers could learn and understand firsthand the challenges that soldiers encounter when attempting to navigate on the ground, including maneuvering in the dark through unfamiliar territory, and communicating among each other. The engineers then used their real-life experience to build a mixed reality headset to assist soldiers in overcoming those challenges. Microsoft worked closely with soldiers, who came to Microsoft’s industrial design and software labs at the company’s Redmond, Washington campus to provide feedback on prototypes. By February 2021, according to Microsoft, the team had collected almost 80,000 hours of soldier feedback, and four rounds of testing.
“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,” said Robin Seiler, corporate vice president, Mixed Reality, Microsoft. “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.”
