Anduril takes over Microsoft’s $22 billion US Army headset program

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(Reuters) – Palmer Luckey-founded defense tech startup Anduril will take over the development and production of Microsoft’s mixed-reality headset program for the U.S. Army, the companies said on Tuesday.

Anduril will assume control over production, as well as future hardware and software development and delivery timelines for the Integrated Visual Augmentation System (IVAS) project, the companies said.

The IVAS program aims to equip soldiers with a wearable system that integrates augmented reality (AR) and virtual reality (VR) to improve situational awareness and support mission command of unmanned systems.

This agreement also establishes Microsoft Azure as Anduril’s preferred hyperscale cloud for all workloads related to IVAS and Anduril AI technologies.

In 2021, Microsoft said it would develop its HoloLens technology to be used in high-tech headsets for the U.S. Army.

Governments and defense firms worldwide are ramping up AI-powered and smart-peripheral technologies to gain an edge on the battlefield.

Luckey, who previously founded virtual reality company Oculus VR, acquired by Facebook in 2014 for $2.3 billion, is no stranger to the space.

The agreement, however, is still pending approval from the U.S. Department of Defense, the companies said.

Anduril has also announced partnerships with ChatGPT-maker OpenAI and Palantir to increase the use of defense data for artificial intelligence training.

The news also comes days after Reuters reported that the defense startup was in talks for a new funding round that could hike the valuation of the company to $28 billion.

(Reporting by Anshuman Tripathy in Bengaluru; Editing by Alan Barona)