Anduril, a defence technology startup founded by Palmer Luckey, will take charge of the US Army's$22 billion mixed-reality headset program. The project, known as the Integrated Visual Augmentation System (IVAS), aims to equip soldiers with augmented and virtual reality capabilities to enhance situational awareness and mission command of unmanned systems.

The agreement sees Anduril assuming responsibility for the production, hardware, and software development of the IVAS project, while Microsoft Azure will serve as the preferred cloud platform for associated workloads.

Microsoft's earlier development efforts utilised HoloLens technology to meet the Army's high-tech demands.

The partnership comes amid a global push by defence firms to integrate artificial intelligence and smart peripherals into military technology. Anduril is also collaborating with OpenAI and Palantir to leverage defence data for AI training. Final approval from the US Department of Defense remains pending.

Reports suggest Anduril is in discussions to secure new funding that could boost its valuation to$28 billion. Luckey, who previously founded Oculus VR, acquired by Facebook in 2014, continues to play a significant role in the advancement of cutting-edge technology for defence applications.