Microsoft gets contract worth up to $22 billion to outfit U.S. Army with 120,000 AR headsets

“The program delivers enhanced situational awareness, enabling information sharing and decision-making in a variety of scenarios,” a blog post from Microsoft’s Alex Kipman reads.

The contract builds on the two-year $480 million contract that Microsoft won back in 2018 to outfit the U.S. army with augmented reality tech. At the time, the contract detailed that the deal could potentially result in follow-on orders of more than 100,000 headsets. “Augmented reality technology will provide troops with more and better information to make decisions. This new work extends our longstanding, trusted relationship with the Department of Defense to this new area,” a Microsoft spokesperson said in a statement sent to TechCrunch at the time.

Microsoft says this announcement marks the transition from prototyping these designs to producing and rolling them out in the field.

This is a massive scale-up for augmented reality tech that has seen few large-scale rollouts and gives Microsoft a government contractor budget to tackle base technology problems that could scale down to consumer and enterprise-level devices in the future. Many of the industry’s biggest players in augmented reality have been reluctant or outspoken in their avoidance of military contracts but Microsoft has remained undeterred in competing for these contracts.