The US Army has handed over control of its ambitious Integrated Visual Augmentation System (IVAS) project to Anduril, a startup founded by Palmer Luckey, in a significant shake-up of the $22 billion program. Luckey announced the news in a blog post on Tuesday, marking a major milestone for the company.

IVAS was initially awarded to Microsoft in 2018, with the goal of developing augmented reality headsets for soldiers based on a ruggedized version of its Hololens technology. The project aimed to provide troops with a heads-up display featuring thermal sensors, Tactical Assault Kit software, and maps. However, the program has been plagued by technical issues and concerns over user acceptance, with the Department of Defense's Inspector General warning in 2022 that the project risked wasting up to $21.88 billion in taxpayer funds.

Despite Microsoft's removal as the prime contractor, the tech giant will continue to provide cloud services for the project. Anduril, which has already integrated its Lattice software into Microsoft's IVAS headsets, will now assume responsibility for delivering the project's ambitious goals. The company has not yet revealed which specific components of IVAS it will be responsible for providing.

The IVAS project has been troubled from the start, with Microsoft's prototypes experiencing technical issues, including difficulties detecting virtual objects. In August, the Army indicated it was open to replacing Microsoft as the prime contractor, and Anduril's win marks a significant coup for the startup.

Luckey's blog post celebrating the news was characteristically colorful, with the founder taking a swipe at competitor Magic Leap, which he dubbed "Tragic Heap." Luckey also hinted at a range of new features planned for the project, although he redacted the details, promising only that they would be "crazy" and "multiply[ing] by ten and then do[ing] it again."

The future of the project's $22 billion budget remains uncertain, with threats to cut funding or cancel the program altogether ongoing. However, Anduril's win marks a significant milestone for the company, which is reportedly in talks to raise up to $2.5 billion in funding at a $28 billion valuation. The company has also announced plans to build a new weapons-building megafactory in Ohio.

The implications of Anduril's win are significant, marking a major shift in the defense technology landscape. As the company takes the reins of one of the Army's most high-profile projects, it will be closely watched to see whether it can deliver on the project's ambitious goals and overcome the technical challenges that have plagued IVAS to date.