Microsoft is finally rolling out HoloLens Integrated Visual Augmentation System (IVAS) systems to the US Military as part of an ongoing contract. However, many questions remain over the value of the $21bn the army will pay to Microsoft. Microsoft shareholders now want an independent review, but the company is urging other investors to reject the idea.
Employees within Microsoft have been against the partnership since day one. The main argument has been that Microsoft's HoloLens tech will ultimately be used for the purpose of killing. While the US Army contract is to train soldiers for modern warfare, Microsoft snapped up the deal.
Back in March, we reported on Microsoft's concern that its $22bn HoloLens contract with the U.S. Army is not going to plan. Reports suggested the US Army was preparing to change the terms of the contract and take fewer devices.
So, it has hardly been a smooth process. Nevertheless, Microsoft is now beginning to send HoloLens 2 with IVAS systems to the army, with a commitment of 120,000 units in total.
There are currently two shareholder motions for an independent review of the contract. However, in its recent Proxy Statement accompanying the Fiscal 2023 Q1 earnings, Microsoft is actively encouraging other investors to reject the motions.
Boston Common Asset Management and Impact Investors says it has concerns regarding Microsoft's contract with the military. Its Proposal 4 wants a review of the ethical ramifications of the deal. Harrington Investments is leading another shareholder/employee-backed review request to:
“Request that the board issue an independent, third-party report, at reasonable expense and excluding proprietary information, to assess the reputational and financial risks to the company for being identified as a company involved in the development of weapons used by the military for training and/or combat purposes.”
The Microsoft Board of Directors has presented opposition statements where it details that Microsoft has been a partner with the US Department of Defense for four decades. Furthermore, the company insists it will “not only be active but proactive in working to address the ethical issues that new technology creates for the military.”
Microsoft is looking to other investors to say no to an independent review when a vote is held on December 13, 2022.
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