Army signs Microsoft's $22 billion headset contract over to Trump donor Palmer Luckey's Anduril
On April 10, 2025, the Army signed off on moving Microsoft's soldier-headset contract, valued at up to $22 billion over 10 years, to Anduril, the defense firm founded by Trump donor Palmer Luckey.
What happened
Microsoft proposed the hand-off on February 11, 2025, pending Defense Department approval. Anduril's senior vice president of engineering, Tom Keane, said the Army signed the contract novation on April 10; Microsoft confirmed the transfer. Luckey said it would involve Microsoft transferring "employees, hardware, IP, facilities, everything, to Anduril." Microsoft had won the 10-year production contract, valued at up to $22 billion, in 2021, to build more than 120,000 headsets. Anduril says it expects to produce no hardware under the deal and is delivering software for the existing headsets. No source gives what Anduril is paid. Luckey gave $200,000 to the Trump 47 Committee and $100,000 to the Republican National Committee on June 28, 2024, FEC records show, and CNBC calls him one of the tech industry's earliest vocal Trump supporters.
Why it matters
The Army signed a contract valued at up to $22 billion over to a company founded by a Trump donor, and then decided the system would never reach soldiers: it will not "test, produce, or field any IVAS variant systems in the future," and the GAO reported in July 2026 that none of the 10,000 units built will be fielded. A 2022 Pentagon inspector general audit had already warned the program risked "wasting up to $21.88 billion in taxpayer funds." Microsoft, not the Army, proposed the move. The reporting, the Congressional Research Service report and the FEC records cited here do not show that Luckey's donations won the contract.
Sources
Breaking Defense; Congressional Research Service; CNBC; Data Center Dynamics; FEC, congress.gov, cnbc.com, datacenterdynamics.com, fec.gov