Microsoft’s big defense contract that looks to supply the US Army with modified HoloLens AR headsets isn’t going so well. As first reported by Bloomberg, the Senate panel that oversees defense spending announced significant cuts to the Army’s fiscal 2023 procurement request for the device.

Microsoft announced last year it had won a US Army defense contact worth up to $22 billion to develop an Integrated Visual Augmentation System (IVAS), a tactical AR headset for soldiers based on HoloLens 2 technology.

Now the Appropriations Defense Subcommittee announced it’s cut $350 million from the Army’s procurement plans for IVAS, leaving around $50 million for the device. The subcommittee cites concerns based around the program’s overall effectiveness.

Concept testing in 2019, Image courtesy CNBC

“The Committee remains concerned that IVAS continues to face software, hardware, and user-acceptance challenges that the Army has not sufficiently addressed,” an official statement reads, which was obtained by Breaking Defense. “While the Committee was encouraged by the Department of the Army’s 2021 decision to extend testing and evaluation for an additional 10 months, it notes that significant development challenges with IVAS 1.1 remain.”

Earlier this year the US Congress froze $394 million from the Army’s IVAS budget, which Business Insider noted at the time would only leave around $400 million. Even then, that was allegedly $200 million short of what Microsoft needed to recuperate development costs.

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Instead the US government appears to be reallocating the 2023 funds to support procurement of the Army’s Enhanced Night Vision Goggle-Binocular, increasing that program’s budget by $300 million.

The subcommittee also increased spending on a number of other Army programs, including ground vehicle procurement, Abrams tank upgrades, Stryker upgrades, new Armored Multi-Purpose Vehicles, and approved budgets for both AH-64 Apache and UH-60 Black Hawk helicopters.

Business Insider reported earlier this year that Microsoft had internally expressed low expectations for its latest version of IVAS, which was set to begin real-world operational tests in May.

This follows reports that cast doubt on a prospective HoloLens 3 amid an internal division that may have hobbled the company’s efforts to release its next AR headset as planned.

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Scott Hayden
Well before the first modern XR products hit the market, Scott recognized the potential of the technology and set out to understand and document its growth. He has been professionally reporting on the space for nearly a decade as Editor at Road to VR, authoring more than 4,000 articles on the topic. Scott brings that seasoned insight to his reporting from major industry events across the globe.
  • Rudl Za Vedno

    It’s a no brainer. $22 billion buys you around 1,500 units of M109 howitzers (long range artillery), desperately needed in Ukraine atm. AR/VR headsets will do s*it to stop Putin’s army, but 1,500 howitzers put to good use just might.

    • Anonymous

      I have other theories to where the money ia going though – the Navy. The US military just released a 500-ship navy plan that is obviously geared towards fighting the Chinese Communists.
      The faster Chinese Communists gets contained or wiped out of Earth, the better for the entire humanity.

      Ukraine may need support but really a several dozens of HIMARS alone is already giving Putler enough headache. Ukraine need tanks for counteroffensive but switching from Ex-Soviet tanks to Western takes training time, not money.

      • Corellianrogue

        “Uncle Joe” loves both the commies in China and the nazis in Ukraine. Not just because he and his son are making a fortune from deals with them, they’re all NWO buddies getting together for totalitarian globalist control.

        • NL_VR

          You mean ukrain is a country full of Nazis and warcrimes on ukrain population is ok?

          • Corellianrogue

            The corrupt Ukrainian EU/NWO puppet government has been using nazis against Ukrainians, especially Russian Ukrainians, since the 2014 coup.

          • NL_VR

            You didnt answer the question

          • kontis

            Green people annexing Crimea wasn’t a warcrime. It was just green people doing green stuff.

            Putin said that removing Yanukovych was unconstitutional therefore illegal, BUT doing a referendum in a subterritory of another country was also unconstitutional, but that ‘s OK, because for Vladimir Vladimirovich Hypocrite (and all his online zealots) illegal unconstitutional things are only bad, when they are geopolitically inconvenient for Russia.

            I don’t remember Texas, California, Catalonia, Scotland and tons of other sub territories around the globe being able to easily separate with their internal votes.

            There are Russian people badly treated all over the world, including the USA. Why didn’t Vladimirovich the Hypocrite invade the USA? He doesn’t have the balls. How about all the minorities badly treated in Russia? Maybe someone should invade Russia, denazify them from Wagner’s dudes with swastika tattos and free those badly treated fellows? Huh?

            It’s funny how Putin zealots talk about double standards of USA and NATO, but never see them in Russia, that has entire history of double standards (which is typical for ANY nationalism). LMAO.

            Ukraine did some awful things (recently and in the past), but this invasion uses it as a super lame excuse that no one with half brain is buying. Try harder zealots. You are no better than some yankee defending Iraq invasion. Actually you are even worse than that.

          • Corellianrogue

            I would hope that Ukraine isn’t “full of nazis” but there are clearly enough to be a problem. Especially when there’s at least 1 nazi battalion. And it’s the Ukrainian government that’s been committing war crimes against its own people, as I said earlier. Plus there are about 1.7 million Ukrainian refugees in Russia. (I’m taking the UN’s claim of 1.3 million and Russia’s claim of 2.1 million and compromising.) Why would so many Ukrainians seek refuge with “the bad guys”? Stop watching the MSM, it’s full of BS.

          • kontis

            That’s nothing. Have you seen all those Ukrainian tanks going to Moscow? How they invaded Russia? All those leaked photos and videos showing so many Ukrainian and NATO soldiers on Russian territory?
            Have you seen it? No? Guess what?! Me neither, comrade!

          • Corellianrogue

            Did you see all those German tanks going to London in old WW2 news footage prior to July 1940? All those leaked photos and videos showing so many North Korean and Vietnamese soldiers on U.S. territory? What about all those Serbian tanks and how about Iraqi soldiers? (I don’t support what the UK, US and whoever else did in Serbia though. Including using fake photos, videos and news stories in the MSM. Like they’re doing now, e.g. Ghost of Kiev and that’s just a tame one.) I don’t care about Putin and Russia should have a better President & government (the same can be said about probably all countries), but anytime somebody goes against the NWO I’ll support that action.

  • ApocalypseShadow

    Should have just went forward creating VR for console and PC backed with games. Xbox fans would have gotten to see what VR is all about. And Windows PC gamers would have not only gotten cheaper headsets, but games to go with it as Microsoft didn’t support them enough and why they hit the bargain bin and fire sales.

    Instead, they supported Hololens which, has a cool concept, but never came out to consumers even after pushing it as a gaming device at E3 playing Minecraft against VR. And even though they secured a contract with the military, it just can’t replace real world senses and reaction. It would be more of a distraction overall having a display in your face.

    As a veteran that has used night vision, while not perfect against bright light and depth perception of shadows, I’d choose the ability to see in the dark than what Microsoft is offering and the government sees that too. If Hololens were that great a product at this point in time, the government would have chose Hololens over what already works on the battlefield.

    The potential is there. But maybe in the year 2050 against sentient androids.

  • Ookami

    AR tech has been in development for military use, with workable prototypes, back in 2006 at least. Curious what the current level of technology is really like, but of course that stuff is likely classified.

    • kontis

      Seeing this hololens contract is pretty obvious that they never had anything as good. And hololens is insufficient, so the conclusion is simple: AR is nowhere where it needs to be to be useful.

      • Ookami

        I suppose so

      • Mattphoto

        I think this is it. For military use, it has to be more than just useful. it has to be relied on or the wrong people die. Right now, computer vision simply is not remotely reliable, I assume it’s junk in battle conditions.

  • Ad

    Good, stop wasting our money on this nonsense, all of the threats to this country are at home and Ukraine has no use for these lemons.

    • Frozenbizkit

      Americans are too busy trying to disarm its own people while giving billions worth of weapons to Ukraine….

  • Corellianrogue

    MSM is the mainstream media, the corrupt and controlled media. So you think Putin just woke up one day and decided to invade Ukraine for no reason at all? LMAO! And I’m from the UK.

    • NL_VR

      Hes war hungry nothing else.
      What you Believe is wrong and you are just against to be against something.
      Please come to ukrain and Open your eyes

      • Corellianrogue

        Yeah, he’s just war hungry, nothing to do with the breaching of agreements that countries bordering Russia would never join NATO, the Ukrainian government refusing to allow regions that voted for independence to become independent, killing thousands of its own people especially Russian Ukrainians (often using nazis to do so) and of course the NWO coup back in 2014 when the EU used snipers to kill protesters on both sides to cause chaos and tried to blame it on the government they were trying to get rid of, just to name a few things. That’s not saying invading was necessarily the best move, but something had to be done sooner rather than later. Although the same could be said for most if not all countries, the people should rise up and get rid of their governments and replace them with real democracy (Switzerland is the only country that’s at least semi-democratic, although these days the EU is interfering) but unfortunately they all seem to be too full of NPCs who just believe whatever the governments and MSM tell them and do whatever they’re told to do without question even if it costs some of them their lives, like taking a dangerous experimental drug labelled a “vaccine” because the TV said so.

        • NL_VR

          Yes, vaccines are experimental drugs. Bill Gates is a murderer. Jews eat children. Covid is a sickness caused by 5G.

          Lets move out in the Forest.

          • ViRGiN

            that guy is a valve fanboy and putin worshipper.

          • NL_VR

            Lol Good one

          • Corellianrogue

            30,000 people in the US alone have been killed by the COVID-19 “vaccine” and that’s just the official numbers, which are massively backlogged last time I heard. Get a clue about what’s really going on in the world, stop watching crap like the BBC & CNN. Or maybe you are just an NPC who is simply not capable of thinking for yourself or accepting anything other than government and MSM propaganda.

          • NL_VR

            What are you meaning with NPC?
            And why do you call others that have another opinion than you for NPC?
            You want people to think Free as long as they think like you?
            Do you want people with different opinions to just go away?