Name: Microsoft wins U.S. Army contract for augmented reality headsets, worth up to $21.9 billion over 10 years
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Microsoft wins U.S. Army contract for augmented reality headsets, worth up to $21.9 billion over 10 years

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Key PointsThe U.S. Army said Wednesday that has won a contract to build more than custom HoloLens augmented reality headsets. The contract for over 120,000 headsets could be worth up to $21.88 billion over 10 years, a Microsoft spokesperson told CNBC.Microsoft shares moved higher after the announcement. The stock was up 1.7% to $235.77 per share at the end of Wednesday's trading session.Microsoft strikes a deal with the U.S. Army for augmented reality headsetsThe deal shows Microsoft can generate meaningful revenue from a futuristic product resulting from years of research, beyond core areas such as operating systems and productivity software.It follows a Microsoft to give the Army of the Integrated Visual Augmented System, or IVAS, in 2018. The new deal will involve providing production versions.The standard-issue HoloLens, which costs $3,500, enables people to see holograms overlaid over their actual environments and interact using hand and voice gestures. An that a CNBC reporter tried out in 2019 displayed a map and a compass and had thermal imaging to reveal people in the dark. The system could also show the aim for a weapon."The IVAS headset, based on HoloLens and augmented by&nbsp;Microsoft Azure&nbsp;cloud services,&nbsp;delivers&nbsp;a platform&nbsp;that will&nbsp;keep&nbsp;soldiers safer and make them more effective," Alex Kipman, a technical fellow at Microsoft and the person who introduced the HoloLens in 2015, wrote in a . "The program delivers enhanced situational awareness,&nbsp;enabling&nbsp;information sharing&nbsp;and&nbsp;decision-making in a&nbsp;variety of scenarios."The headset enables soldiers to fight, rehearse and train in one system, the Army said in a . The contract, which was awarded on Friday, has a five-year base period, with a five-year option after that, an Army spokesperson told 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 to provide cloud services to the Defense Department, beating out , the leader of the public-cloud market. Amazon has been , which could be worth up to $10 billion, in federal court.Microsoft wins military contract that could be worth $22 billion over 10 yearsSome Microsoft employees to hold off on submitting for the cloud contract, and similarly, a group of employees to cancel the HoloLens contract. "We did not sign 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 defended the Army augmented reality project, telling that "we made a principled decision that we're not going to withhold technology from institutions that we have elected in democracies to protect the freedoms we enjoy." The Army, meanwhile, has suggested the augmented reality technology could help soldiers target enemies and prevent the killing of civilians.-- CNBC's Amanda Macias contributed to this report.

Key PointsThe U.S. Army said Wednesday that has won a contract to build more than custom HoloLens augmented reality headsets. The contract for over 120,000 headsets could be worth up to $21.88 billion over 10 years, a Microsoft spokesperson told CNBC.Microsoft shares moved higher after the announcement. The stock was up 1.7% to $235.77 per share at the end of Wednesday's trading session.Microsoft strikes a deal with the U.S. Army for augmented reality headsetsThe deal shows Microsoft can generate meaningful revenue from a futuristic product resulting from years of research, beyond core...

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Microsoft wins U.S. Army contract for augmented reality headsets, worth up to $21.9 billion over 10 years

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