According to reports from Reuters and CNBC, Microsoft plans to hand over industry leadership of the U.S. Army’s $22 billion Integrated Visual Augmentation System (IVAS) program to Anduril Industries, a defense technology startup founded by Palmer Luckey.

Anduril Takes Over IVAS

On February 11, 2025, Anduril Industries announced its takeover of the U.S. Army’s Integrated Visual Augmentation System (IVAS) program from Microsoft. This defense technology startup, founded by Palmer Luckey, will assume oversight of production, future hardware and software development, and delivery timelines for the $22 billion project. The partnership aims to enhance soldiers’ battlefield awareness by integrating augmented reality (AR) and virtual reality (VR) technologies into wearable systems. Pending Department of Defense approval, this transition marks a significant shift in the development of advanced mixed-reality headsets for military.

Microsoft’s Role in IVAS

While transitioning leadership to Anduril, Microsoft will continue to play a crucial role in the IVAS program by providing AI and cloud infrastructure support. The tech giant’s Azure platform has been established as Anduril’s preferred hyperscale cloud for IVAS-related workloads. This strategic partnership leverages Microsoft’s strengths in cloud computing and artificial intelligence, complementing Anduril’s expertise in defense technology and manufacturing. The collaboration builds upon previous efforts, where Anduril’s Lattice platform was successfully integrated into the IVAS system.

IVAS Program Challenges

The IVAS program has faced significant challenges since its inception. Early prototypes of the headset reportedly caused nausea and headaches among users, leading to delays in the system becoming fully operational. These issues prompted the Army to reassess the program’s timeline and effectiveness. Despite the setbacks, the U.S. military remains committed to advancing battlefield technology, with the Army considering a follow-on competition called IVAS Next. The transition to Anduril’s leadership is seen as a strategic move to overcome these hurdles and accelerate innovation in military wearable technology.

Future of Defense Technology

The collaboration between Anduril and Microsoft on the IVAS program signals a significant leap forward in military wearable technology. Palmer Luckey, Anduril’s founder, emphasized the potential life-saving impact of the Squad Immersive Virtual Trainer (SiVT) component of IVAS, stating it “has the potential to save more lives than practically anything else we can imagine building” by addressing the fact that more troops are lost in training than in combat. This partnership is poised to accelerate innovation in critical areas of defense technology, particularly as global tensions rise and advancements in AI and smart peripherals continue to shape modern battlefield capabilities.