Microsoft's military Hololens is under heavy fire
The military Hololens remains a difficult project for Microsoft. A U.S. Senate committee cuts the 2023 budget by more than 85 percent.
The military Hololens IVAS (Integrated Visual Augmentation System) was expected to earn Microsoft up to $22 billion in the coming years. But the immature technology means Microsoft can't meet the military's expectations as planned. The result is severe budget cuts - and fundamental doubts that the announced budget can be met.
Deep budget cuts for military hololens
Lately, there have been repeated reports that the inadequate display technology in particular means that soldiers see little added value in the combat headset during initial field tests.
Now the Appropriations Defense Subcommittee has massively cut the IVAS budget for 2023 - by $350 million. Originally, the military could have invested 400 million in the IVAS project, 50 million US dollars of which is now left.
Based on the findings so far, the committee is concerned that the military has not adequately addressed software, hardware, and acceptance issues with IVAS. The current version, IVAS 1.1, still has "significant development challenges", the committee notes. $300 million of the freed-up budget will go toward a project for a better night vision device.
It's the second significant budget cut: Congress had already frozen $394 million in funding requested by the Army for IVAS in early March, leaving only $405 million available. Microsoft reportedly needed at least $604 million to break even.
Hololens also has to fight away from the battlefield
Despite the harsh verdict, the subcommittee continues to see potential in the device, whose testing and evaluation phase has been extended by 10 months. It said the headset could expand the capabilities of soldiers and is also a step for the military to partner with companies not traditionally from the defense industry, "capable of delivering innovative capabilities that meet warfighter requirements."
The Senate committee's cut is likely to hit Microsoft's IVAS team particularly hard, as Microsoft's cloud and AI chief Scott Guthrie was most recently announcing positive news internally. He said IVAS had been cleared for operational testing and had reached a major milestone, the "culmination of years of hard work."
The commercial Hololens project also appears to be stalling. Most recently, the Hololens team lost numerous professionals, including Hololens co-inventor Alex Kipman. Microsoft is rumored to be partnering with Samsung for a new XR device. Microsoft CEO Satya Nadella said most recently that his company wants to invest primarily in Metaverse software.
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