Microsoft Stands By Its $480 Million Pentagon Contract

Microsoft is pressing ahead with a $480 million contract to build augmented reality technology for the Army despite strong backlash inside the company.

A group of Microsoft employees on Friday called for the company to back out of a deal to provide tech for the Pentagon’s Integrated Visual Augmentation System program. In an open letter to chief executive Satya Nadella and president Brad Smith, employees said the effort amounts to “weapons development” and they “refuse to create technology for warfare and oppression.”

The company, however, has no intention of distancing itself from the project, a Microsoft spokesperson told Nextgov on Monday. The decision comes amid growing tension between tech companies and the national security sector.

“We always appreciate feedback from employees and provide many avenues for their voices to be heard—in fact, we heard from many employees throughout the fall,” the spokesperson said. “We’re committed to providing our technology to the U.S. Department of Defense … [and] we’ll remain engaged as an active corporate citizen in addressing the important ethical and public policy issues relating to AI and the military.”

Microsoft CEO Satya Nadella also publicly defended the contract on Monday, telling CNN the company won’t “withhold technology” from democratic governments. The same day, Microsoft debuted the HoloLens 2, the latest version of the company’s augmented reality headset, at the Mobile World Congress in Barcelona.

Under the contract, Microsoft will provide up to 100,000 of its HoloLens headsets to the Army for use in military training and combat operations. According to the solicitation, the headsets would be outfitted with artificial intelligence and machine-learning capabilities, and provide troops with “increased lethality, mobility, and situational awareness.”

By overlaying soldiers’ field of vision with an assortment of environmental data, the tech would help them more easily spot and engage with potential enemies, officials said. The headset would also merge “live and virtual environments” to allow soldiers on the ground to “train as [they] fight,” according to the solicitation.

The contract, which the Army awarded in November under other transaction authority, would put the tech in production as early as 2020. Though Microsoft’s headsets wouldn’t necessarily serve as weapons in and of themselves, they would significantly expand the military’s use of augmented and virtual reality on the battlefield.

Shortly before Microsoft won the contract, President Brad Smith penned a blog post reaffirming the company’s simultaneous commitment to providing the military with “the nation’s best technology” while ensuring the responsible use of emerging tools like artificial intelligence. Beyond the augmented reality project, Microsoft is also one of the frontrunners for the Pentagon’s $10 billion Joint Enterprise Defense Infrastructure cloud contract.

But while Microsoft positions itself as a government ally, some in the tech sector are looking to distance themselves from federal defense and national security efforts.

In October, Google took itself out of the running for the JEDI cloud contract, citing ethical issues and concerns that it couldn’t meet the department’s security requirements. During the summer, the company also bailed on a controversial military artificial intelligence program called Project Maven after employees raised concerns about the project’s lethal intentions.

Over the past year, Microsoft employees have also voiced their opposition to both the JEDI program and a separate effort to provide cloud services for U.S. Immigration and Customs Enforcement.