By Charles Switzer
10:47am PST, Feb 13, 2025
Palmer Luckey's Anduril Takes Over Microsoft's $22 Billion Military Contract
Matt Gaetz's brother-in-law
Palmer Luckey's defense startup, Anduril, is set to take control of Microsoft's massive $22 billion dollar contract to develop the U.S. Army's Integrated Visual Augmentation System (IVAS). Both companies announced the transition on Tuesday, February 11, with Anduril assuming oversight of production, future hardware and software development and delivery timelines for the program,
Business Insider reported.
The IVAS system is designed to provide soldiers with real-time battlefield information through augmented and virtual reality, with a key feature being its ability to help troops quickly identify drones.
Here is everything you need to know about Luckey's icing out of Silicon Valley and where his innovations are leading.
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Luckey Calls Contract Takeover "Deeply Personal"
For Luckey, this moment represents a full-circle victory. Reflecting on his journey in a blog post, he wrote, "Everything I've done in my career — building Oculus out of a camper trailer, shipping
VR to millions of consumers, getting run out of Silicon Valley by backstabbing snakes betting that Anduril could tear people out of the big tech megacorp matrix and put them to work on our nation's most important problems — has led to this moment."
The takeover aligns with Anduril's original mission, as Luckey revealed that providing high-tech combat goggles to the U.S. military was part of his company's pitch deck eight years ago.
Microsoft's IVAS Struggles Paved the Way for Anduril
Microsoft originally secured the 10-year IVAS contract in 2021 but faced multiple setbacks. The company modified its HoloLens 2 headset for military use, but soldiers reported software glitches, headaches, nausea and neck strain.
As a result, the Army delayed the program in October 2021, forcing repeated modifications.
Internal struggles at Microsoft compounded the issue with journalist Ashley Stewart reporting in 2022 that Microsoft scrapped planned for a third-generation HoloLens and had lost billions on its mixed-reality initiatives.
By October 2024, Microsoft announced it would halt production of the HoloLens 2, leaving the IVAS program in limbo.
What's Next for IVAS Under Anduril?
Anduril's takeover still requires U.S. government approval, but the transition suggests a major shift in military augmented reality technology. Anduril and Microsoft's joint statement did not mention the discontinued HoloLens 2, leaving uncertainty about what hardware will power IVAS moving forward.
However, Anduril agreed to make Microsoft's Azure its "preferred hyperscale cloud" for the program. With the project now in Anduril's hands, Luckey remains confident, writing, "We have a shot to prove that this long-standing dream is no windmill."
The Future of Mixed-Reality Warfare
Luckey envisions a future where soldiers are equipped with cutting-edge battlefield technology, stating in his blog, "I want to turn warfighters into technomancers."
The takeover further highlights Anduril's growing influence in military defense technology, as the company has already expanded into drones, AI and counter-electronic warfare.
