Microsoft lost billions of dollars on its HoloLens mixed-reality project, and the company's involvement in a related contract with the US Army is in d

Microsoft lost billions of dollars on HoloLens, and its huge IVAS military contract is in trouble

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2024-10-15 05:30:02

Microsoft lost billions of dollars on its HoloLens mixed-reality project, and the company's involvement in a related contract with the US Army is in doubt, according to people familiar with the situation.

The software giant recently confirmed plans to halt production of the HoloLens 2 headset and will stop supporting the device. That's led to questions about the Integrated Visual Augmentation System, a set of mixed-reality goggles that Microsoft has been developing for the US Army.

The Microsoft team that's been working on IVAS has been whittled down, with the majority of the business and engineering brainpower moving on to other projects, the people said. They asked not to be identified discussing private matters.

The company is no longer investing in major innovative improvements to the IVAS device and is instead focusing on smaller, iterative updates requested by the military. It's also having the military pay for these updates, according to the people familiar.

"We will continue to invest in mixed reality opportunities with first-party software solutions and services, partnering with the broader mobile phone and mixed reality hardware ecosystem," a Microsoft spokesperson said. "In addition, we remain fully committed to the IVAS program with the US Department of Defense."