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The Microsoft HoloLens. (Microsoft Photo)

Microsoft won a nearly $480 million contract to provide the U.S. Army with 100,000 HoloLens headsets, a major boon for the company’s “mixed reality” division that comes at a time of increased tensions internally over the tech giant’s work for the Department of Defense.

Microsoft beat out several other suitors, including Magic Leap, for the contract. According to documents for the Army’s Integrated Visual Augmentation System project, the goal is to “manufacture a single platform that soldiers can use to fight, rehearse, and train. This platform will provide increased lethality, mobility and situational awareness.”

“Augmented reality technology will provide troops with more and better information to make decisions,” Microsoft said in a statement. “This new work extends our longstanding, trusted relationship with the Department of Defense to this new area.”

Bloomberg, which first spotted the contract win, reports that the deal will create a dramatic increase in HoloLens production. Citing a presentation for the European patent office, Bloomberg reports that Microsoft had sold about 50,000 total HoloLens devices as of this spring. HoloLens is aimed more at developers and enterprise users rather than consumers.

The deal comes as Microsoft received internal pushback on some of its government contracts. Microsoft is in the running for a $10 billion Pentagon cloud contract. Microsoft President and Chief Legal Officer Brad Smith authored a blog post last month defending its pursuit of the contract, claiming that technologists should be involved in government adoption of new innovations to ensure they are not misused.

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