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Controversy over the fate of an advanced headset project for the US Army, combining high-resolution night, thermal, and soldier-borne sensors.

While a report by Business Insider on February 2 revealed HoloLens 3 may have been canceled by Microsoft, in a move allegedly signaling “the end of the road” for the headset, Microsoft claims that “HoloLens is doing great.” 

Microsoft has reportedly agreed to partner with Samsung on a new mixed reality device, a move that has apparently “inflamed divisions” that exist in Microsoft’s mixed reality teams.

The software giant has been working on a custom HoloLens headset for the US Army in a contract that could be worth up to $21.88 billion over 10 years. The headset is supposed to use augmented reality and machine learning to enable a “life-like mixed reality training environment.”

The software maker has been working closely with the US Army since 2018, and soldiers have been testing the Integrated Visual Augmentation System (IVAS) headsets. However, the US Army has pushed back the date it plans to field Microsoft’s custom headset, according to Microsoft strongly disputed reports. “We remain committed to HoloLens and future HoloLens development,” Microsoft spokesperson told Business Insider. 

But a February 4 tweet by Microsoft’s Alex Kipman, who leads the company’s mixed reality division, said Microsoft has not abandoned development on HoloLens 3.