Microsoft has won a contract to supply the US Army with HoloLens-based headsets. The contract could be worth up to $21.88 billion over 10 years, and CNBC reports that it will involve Microsoft supplying 120,000 headsets. The software maker has been working closely with the Army since 2018, and soldiers have been testing the Integrated Visual Augmentation System (IVAS) headsets over the past two years. These devices combine high-resolution night, thermal, and soldier-borne sensors into a heads-up display.

“The system also leverages augmented reality and machine learning to enable a life-like mixed reality training environment so the Close Combat Force (CCF) can rehearse before engaging any adversaries,” reads a US Army statement. In February, the Army revealed how a newer, more ruggedized version of its heads-up display can let operators of armored vehicles see through the walls of, for instance, a Bradley Fighting Vehicle. An earlier version was criticized for poor sensor and GPS performance, but you can see that the design has now changed quite a bit.

An earlier IVAS prototype. | Image: US Army

The newer IVAS. | Image: US Army

Microsoft initially won a $479 million contract to supply the US Army with a version of its HoloLens augmented reality headset back in 2018. It was a move that was met with fierce resistance from some Microsoft employees, forcing CEO Satya Nadella to respond. The calls didn’t stop the United States Department of Defense and Microsoft from working together on this new headset, though.

“Microsoft has worked closely with the US Army over the past two years, and together we pioneered Soldier Centered Design to enable rapid prototyping for a product to provide Soldiers with the tools and capabilities necessary to achieve their mission,” says Alex Kipman, Microsoft’s HoloLens inventor.

HoloLens hasn’t seen any significant hardware changes since the second version of Microsoft’s mixed reality headset launched in 2019. Microsoft has been gradually improving the software side of its HoloLens headsets, alongside gesture improvements. Recently, this has expanded to include Microsoft Mesh, the company’s vision to support what Microsoft calls “holoportation,” allowing people to appear as themselves in a virtual space.

While the initial wave of augmented reality and similar headsets like the HoloLens, Google Glass, and Snapchat Spectacles wound up pivoting their business models from end users to commercial, industrial, and military applications, things appear to be heating up again in the space. Facebook reportedly has nearly one-fifth of its employees working on VR and AR; Apple charged its former hardware boss with overseeing AR and VR specifically; and Samsung, Snap, Qualcomm, and others have been showing off more prototypes lately.