Army Awards Contract to Anduril for Troubled IVAS Project

The United States Army plans to grant control of the Integrated Visual Augmentation System (IVAS) project to upstart weapons maker Anduril, pending final Department of Defense (DoD) approval. The announcement was made by Anduril’s founder, Palmer Luckey, in a blog post on Tuesday.

Background of IVAS Project

IVAS was initially awarded to Microsoft in 2018 to develop augmented reality headsets for soldiers based on a ruggedized version of HoloLens. The initial budget for IVAS was set at $21.9 billion. The project aimed to provide troops with a heads-up display featuring thermal sensors, Tactical Assault Kit software, and maps.

Anduril Takes Over Contract

Anduril will now assume control of the contract, with Microsoft continuing to provide cloud services. Anduril will oversee production, the development of hardware and software, and delivery timelines. This change comes after Microsoft’s prototypes suffered from technical issues, including detecting virtual objects.

History of IVAS Problems

IVAS has faced numerous challenges since its inception. In 2022, the DoD’s inspector general reported that IVAS was not meeting user needs, potentially wasting up to $21.88 billion in taxpayer funds. The project has also been plagued by technical issues, with prototypes struggling to detect virtual objects.

Anduril’s Plans for IVAS

Luckey’s blog post hinted at new features planned for the project, but redacted the details. He also teased that Anduril’s vision for IVAS would be "crazy" and urged people to imagine the possibilities. The company is reportedly in talks to raise up to $2.5 billion at a $28 billion valuation.

Next Steps

The transfer of control is pending DoD approval, although both companies have announced the change in the contract. Microsoft’s VP of mixed reality, Robin Seiler, praised the work of the company’s teams in helping to develop the IVAS program. As the project moves forward, it remains to be seen whether the entire $22 billion budget will be retained or if funding will be cut or canceled.

Anduril’s Expansion Plans

Anduril is expanding its operations, with plans to build a $1 billion weapons megafactory in Ohio. The company is also in talks to raise capital, which could further accelerate its growth. With its new contract with the Army, Anduril is poised to become a major player in the military’s technology landscape.