xReality Group pulls off Texas two-step with $5.7m deal and $2.1m AI boost
It’s been a week of double-barrelled news for xReality Group (ASX: XRG), the virtual reality training outfit that has one foot in Sydney’s manufacturing floor and the other in the heart of U.S. law enforcement.
On Thursday, the company unveiled its largest-ever order for the flagship Operator XR OP-2 systems — a contract worth up to $5.71 million from the Texas Department of Public Safety (DPS). In the same breath, XRG revealed it had secured a $2.1 million grant from the Australian Government’s Industry Growth Program to fast-track the integration of artificial intelligence into its training systems.
For a company still known to many retail investors for its indoor skydiving heritage, the news cements XRG’s evolution into a serious player in the military and law enforcement simulation space.
A Lone Star order
The Texas DPS, which is responsible for everything from highway patrol to the Texas Rangers, will take delivery of the OP-2 systems in the second quarter of FY26. The contract comprises $4.3 million in software licences, hardware, implementation and two years of support, with a further $1.4 million available for optional services in years three to five.
OP-2 by Operator XR
Given Texas’s size — 30 million residents, sprawling geography, and a law enforcement remit that covers everything from border security to disaster response — the order represents a high-profile endorsement. XRG chief Wayne Jones said the deal “underscores the readiness of our platform for statewide deployment and reinforces our U.S. growth strategy… helping officers train more often, more safely, and with better outcomes for the communities they serve”.
It’s not just about revenue; the Texas DPS is a marquee client in a market of 31 similar agencies across the U.S. — the sort of reference customer that can open doors in procurement-heavy government circles.
Canberra cash for AI push
Closer to home, XRG’s $2.1 million Industry Growth Program grant will be paid quarterly over two years, starting this month. The funds will help ramp up AI integration into Operator XR, enabling real-time feedback, instructor augmentation, and automated scenario creation. The money will also double training weapon manufacturing capacity at the company’s Penrith HQ and fund global security and quality certifications.
Jones said the funding would “fast track Operator XR’s AI roadmap,” building on the recent hire of AI lead Ash Crick, who is tasked with embedding adaptive learning and AI-powered decision support across the platform. The end game is to strengthen XRG’s position as the market leader in tactical simulation for defence and law enforcement.
The bigger picture
These announcements are part of a broader trend where immersive simulation tech is being adopted as a safer, cheaper and more flexible alternative to live training. For XRG, the combination of a high-profile U.S. contract and government-backed R&D funding positions the company to chase larger global defence and law enforcement opportunities.
From a business development perspective, the Texas deal validates XRG’s product in one of the toughest public safety environments in the world, while the Industry Growth Program grant provides a war chest to enhance differentiation and scalability.
As Jones might put it, XRG is now training both sides of the Pacific — and with Texas on board, the company’s next steps could have a distinctly global cadence.