Magic Leap is Bidding on an Army Combat Contract

Magic Leap Inc. is pushing to land a contract with the U.S. Army to build augmented-reality devices for soldiers to use on combat missions, according to government documents and interviews with people familiar with the process. The contract, which could eventually lead to the military purchasing over 100,000 headsets as part of a program whose total cost could exceed $500 million, is intended to “increase lethality by enhancing the ability to detect, decide and engage before the enemy,” according to an Army description of the program. A large government contract could alter the course of the highest-profile startup working on augmented reality, at a time when prospects to produce a consumer device remain uncertain.

Building tools to make soldiers more deadly is a far cry from the nascent consumer market for augmented reality. But the army’s program has also drawn interest from Microsoft Corp., whose HoloLens is Magic Leap’s main rival. The commercial-grade versions of both devices still face significant technological hurdles, and its not clear the companies can fulfill the army’s technical requirements. If recent history is any guide, a large military contract is also sure to be controversial within the companies.