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Microsoft's bet on HoloLens looks to be paying off.

The US Army has agreed to pay Microsoft almost half a billion dollars to supply upwards of 100,000 prototype augmented reality headsets for use in training scenarios and actual combat, Bloomberg reports.

If successfully trailed, the deal could lead to the sale of over 100,000 headsets to the US Army.

Microsoft beat out several other suitors, including Magic Leap, for the contract.

The goal is to "increase lethality by enhancing the ability to detect, decide and engage before the enemy", according to an official description of the project and Microsoft is understandably excited about the prospect: "This new work extends our longstanding, trusted relationship with the Department of Defense to this new area", a statement emitted from Redmond revealed.

The system should provide remote viewing of weapon sights to enable low risk, rapid target acquisition, perform automated or assisted target acquisition, integrate both thermal and night vision cameras, track soldier vitals such as heart and breathing rates, and detect concussions.

Uses? The Army plans to use the headsets for combat missions as well as training.

Only about 50,000 units have been sold so far, according to a recent Microsoft video. It's not clear if Microsoft will get the same kind of pushback on the contract to supply Hololens units, which will be used in live combat.

However, the DoD is also tasking the tech giant with developing military-grade software to go along with the highly customized devices.

The headset has never really been sold as a consumer product, but it's popular with enterprises for manufacturing, training, marketing and other purposes. He reaffirmed that "Microsoft will be engaged" with the United States military. Microsoft employees recently signed a petition criticizing its contract with US Immigration and Customs Enforcement (ICE). President and Chief Legal Officer Brad Smith wrote last month that employees with ethical concerns would be allowed to switch projects. Based on the contract it was awarded, Microsoft will need to deliver 2,500 of these prototype headsets to the US Army within the next two years.