Microsoft awarded a $21.9 billion contract from US Army

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Microsoft has been awarded a $21.9 billion contract to manufacture AR devices for the US Army. The Army announced on Wednesday that it had awarded Microsoft (MSFT) a contract called Integrated Visual Augmented Systems to build augmented reality systems based on its HoloLens 2 software (IVAS). According to the Army, the devices are designed to help soldiers “fight, rehearse, and practice using a single platform.”

The contract has a five-year base and a five-year extension option, with a cumulative value of nearly $21.9 billion over ten years. According to Microsoft, the Army’s initial aim is to include systems for its entire Close Combat Force (CCF), which would require manufacturing more than 120,000 units.

The deal is a continuation of Microsoft’s previous work on the devices for the US Army. The tech behemoth was awarded a $479 million contract to produce prototypes of the devices in 2018, and the latest deal revealed Wednesday would see them go into development and into the field.

Employees also criticized Microsoft’s work on the Army’s HoloLens project, but CEO Satya Nadella defended it, stating that the organization will not “withhold technology from institutions that we have elected in democracies to protect the freedoms we enjoy.”

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