 "Microsoft can't crack VR headset that it was designing for the US military, to hand off project to Anduril")
Microsoft’s attempt to build advanced augmented reality (AR) headsets for the US Army is shifting gears, with defence tech startup Anduril Industries stepping in to take the lead.
The six-year-old project, which has faced multiple challenges, will see Microsoft move into a more supportive role, and focus on AI and cloud infrastructure. Meanwhile Anduril will take charge of hardware development, software improvements, and production timelines.
If approved by the Department of Defense, this expanded partnership could breathe new life into the Integrated Visual Augmentation System (IVAS) program, which has struggled with technical flaws and budget concerns. While Microsoft originally spearheaded the initiative with its modified HoloLens 2 headset, feedback from soldiers and government officials made it clear that the device needed significant improvements.
A rocky road for Microsoft’s military AR headsets
Microsoft’s involvement in the IVAS program began in 2019, with the objective to create headsets that would enhance battlefield awareness with AR overlays.
The concept was promising—soldiers could view virtual maps, track squad locations, see weapon reticles, and use thermal imaging for night vision. However, real-world testing revealed serious flaws that prevented the headset from being combat-ready.
Among the biggest issues was motion sickness, a problem well-known to VR users. Soldiers reported nausea, headaches, and eyestrain after using the device, making prolonged use impractical. Additionally, the headset was bulky, had a limited field of view, and even emitted a glow—an obvious tactical disadvantage in stealth operations.
These shortcomings led to Congress rejecting the Army’s request to purchase 6,900 units in 2023, instead allocating $40 million for Microsoft to improve the design. While the Army accepted the revised version later that year, it has yet to see battlefield deployment.
Anduril steps in to take over development
With Microsoft shifting its focus to AI and cloud computing for IVAS, Anduril Industries will now oversee the actual production and refinement of the headset. Founded by Palmer Luckey, the creator of the Oculus Rift and a key figure in modern VR, Anduril brings extensive expertise in both defence technology and extended reality (XR) development.
The company is best known for its advanced military systems, including drone interceptors, surveillance towers, and even autonomous submarines. Given Luckey’s background in VR, the IVAS project seems like a natural fit for Anduril’s growing defence portfolio.
Impact Shorts
More ShortsThe Army remains cautiously optimistic about the latest IVAS prototypes but has made it clear that costs need to be significantly reduced. At its current price of $80,000 per headset, the device is far from affordable for large-scale deployment. The US Army is possibly looking to order up to 121,000 units, but before that happens, the headset must pass a rigorous combat test later this year.
A bigger push for AI in military tech
Anduril’s growing role in military technology goes beyond AR headsets. In December, the company partnered with OpenAI to integrate AI models like GPT-4o into its defence systems. These AI-enhanced systems are expected to improve battlefield decision-making, particularly in drone defence and automated surveillance.
For now, Microsoft’s retreat from direct hardware development on IVAS signals a shift in strategy, allowing a more specialised defence contractor to refine the technology. Whether Anduril can solve the headset’s issues and make it viable for real combat use remains to be seen, but the partnership represents another step in merging cutting-edge AI and AR technology with modern warfare.
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