Microsoft, the tech giant, won a government agreement to build augmented reality headsets for the United States military, the Army and the company said in separate announcements on Wednesday, securing the contract expected to bring in approximately $22 billion for the software company over the next decade.
Furthermore, Microsoft said the headset would base on its HoloLens augmented reality technology, which initially developed for video games. The headsets would be a part of what the Army refers to as an Integrated Visual Augmentation System, which projects contextual information and imagery in front of the eyes of the user. Additionally, the Army said the technology could help American soldiers to improve situational awareness, decision-making skills, and target engagement against current and future adversaries.
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Overall Worth and Duration of the Contract
According to Microsoft, the contract has worth around $21.9 billion over the course of ten years. The contract would build on a $480 million agreement the Army struck with Microsoft in 2018, securing several prototypes for the headset technology. Furthermore, the latest deal would move the project into a manufacturing phase, supplying over one lack and twenty-thousand units of the technology to soldiers in the Close Combat Force. Microsoft shares were up approximately 1.7% to $235.77 at the close of the market on Wednesday.
In 2019, some employees of Microsoft raised the alarm that the tech firm had agreed to provide weapon technology to the United States and demanded the withdrawal of the $480 million deal with the Army. Moreover, several employees wrote in a letter to Microsoft that they didn’t sign up to develop weapons, and they demand a say in how their work was used. The Microsoft headset enables soldiers to fight, train and rehearse in one system, the military said in a statement.
An army spokesman told CNBC in an email that the agreement, which awarded on Friday, has a 5-year base duration, with a 5-year option after that. The contract makes Microsoft a more prominent technology supplier to the American military. After beating out Amazon, Microsoft secured a deal in 2019 to provide cloud services to the U.S. Defense Department. Amazon has been challenging the agreement in Federal court, which could be worth up to about $10 billion.
Microsoft CEO Defended the Army Augmented Reality Project
Some days later, Satya Nadella, the Microsoft CEO, defended the Army augmented reality project, telling CNN that they made an ethical decision that they made a principled decision that they were not going to suppress technology from institutions that they were not going to withhold technology from institutions that they elected in democracies to defend the freedoms they enjoy.