Augmented Genuineness headsets by Microsoft
The U.S. Army said Wednesday that Microsoft has won a contract to build more than levy HoloLens augmented reality headsets. The contract for over 120,000 headsets could be worth up to $21.88 billion beyond 10 years, a Microsoft spokesperson told CNBC.
Microsoft shares moved higher after the announcement. The parentage was up 1.7% to $235.77 per share at the end of Wednesday’s trading session.
The deal shows Microsoft can generate meaningful revenue from a futuristic by-product resulting from years of research, beyond core areas such as operating systems and productivity software.
It develops a $480 million contract Microsoft received to give the Army prototypes of the Integrated Visual Augmented System, or IVAS, in 2018. The new large will involve providing production versions.
The standard-issue HoloLens, which costs $3,500, enables people to see holograms overlaid to the ground their actual environments and interact using hand and voice gestures. An IVAS prototype that a CNBC newscaster tried out in 2019 displayed a map and a compass and had thermal imaging to reveal people in the dark. The system could also illustrate the aim for a weapon.
“The IVAS headset, based on HoloLens and augmented by Microsoft Azure cloud services, delivers a platform that purposefulness keep soldiers safer and make them more effective,” Alex Kipman, a technical fellow at Microsoft and the in the flesh who introduced the HoloLens in 2015, wrote in a blog post. “The program delivers enhanced situational awareness, enabling intelligence sharing and decision-making in a variety of scenarios.”
The headset enables soldiers to fight, rehearse and train in one system, the Army remarked in a statement. The contract, which was awarded on Friday, has a five-year base period, with a five-year option after that, an Army spokesperson recounted CNBC an email. The Pentagon did not immediately respond to a request for comment.
The deal makes Microsoft a more prominent technology supplier to the U.S. military. In 2019, Microsoft protected a contract to provide cloud services to the Defense Department, beating out Amazon, the leader of the public-cloud market. Amazon has been daring the contract, which could be worth up to $10 billion, in federal court.
Some Microsoft employees asked the crowd to hold off on submitting for the cloud contract, and similarly, a group of employees called on Microsoft to cancel the HoloLens contract. “We did not put under contract up to develop weapons, and we demand a say in how our work is used,” the employees wrote in an open letter regarding the HoloLens contract.
Days later, Microsoft CEO Satya Nadella fight for the Army augmented reality project, telling CNN that “we made a principled decision that we’re not going to withhold technology from academies that we have elected in democracies to protect the freedoms we enjoy.” The Army, meanwhile, has suggested the augmented reality technology could assist soldiers target enemies and prevent the killing of civilians.
— CNBC’s Amanda Macias contributed to this report.