Microsoft CEO defends $480 million HoloLens contract with the US Army

Satya Nadella says he won't "withhold" technology from the military, despite employee backlash.

Ian Sherr Contributor and Former Editor at Large / News
Ian Sherr (he/him/his) grew up in the San Francisco Bay Area, so he's always had a connection to the tech world. As an editor at large at CNET, he wrote about Apple, Microsoft, VR, video games and internet troubles. Aside from writing, he tinkers with tech at home, is a longtime fencer -- the kind with swords -- and began woodworking during the pandemic.
Ian Sherr
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Microsoft's CEO Satya Nadella is defending himself after a group of employees published an open letter calling on the company to ditch a multimillion dollar contract HoloLens contract with the US Army.

Nadella told CNN Business in an interview Monday that the contract was not merely about supplying the military with HoloLens headsets, which overlay computer images on the real world. Instead, he framed it as being a responsible corporate citizen in the US.

"We made a principled decision that we're not going to withhold technology from institutions that we have elected in democracies to protect the freedoms we enjoy," he said in the interview during MWC Barcelona, the world's largest phone show. 

Employees have criticized the $480 million contract, tweeting a copy of an open letter to Nadella on Friday, just two days before the company was set to announce its HoloLens 2 next-generation headset. The group, in its letter, said they "did not sign up to develop weapons." By Tuesday, the group said more than 250 employees had signed on.

"We demand a say in how our work is used," the group continued. "We refuse to create technology for warfare and oppression." 

Microsoft declined to comment further or make Nadella available. The US Army declined to comment.

Watch this: Microsoft HoloLens 2: A first dive into the future of AR

The public debate between Nadella and his employees is part of an ongoing conundrum in Silicon Valley about how tech companies work with governments around the world.

For example, employees at Google last year protested Project Maven, the search giant's efforts to offer advanced artificial intelligence to help make military weapons more efficient. They've also pushed back on Google's efforts to create a censored version of its search engine for China, known as Dragonfly.

Also last year, the American Civil Liberties Union sent a petition letter to Amazon with more than 150,000 signatures asking the company to stop selling its surveillance system to law enforcement. And three years ago, Apple fought the FBI in court over whether it should be forced to help the government hack into a terrorist's iPhone.

In Microsoft's case, Nadella says he'll be open with employees about the decision to sell HoloLens headsets to the military, but so far has remained firm he won't cancel it.

"We were very transparent about that decision and we'll continue to have that dialogue [with employees]," he said in the CNN interview. 

Microsoft's HoloLens 2 pulls us further into an augmented reality

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First published Feb. 25, 3:01 p.m. PT.
Update, Feb. 26 at 8:42 a.m.: Adds that more employees have signed on to the open letter pushing back against Microsoft's military contract.