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Here is a decent overview of the different approaches to the problem ranging from consumer (TrackingPoint) to military (DARPA/Sandia): http://www.army-technology.com/features/featurelock-and-laun...

The TrackingPoint system is pretty awesome especially since it's tech which is available today and has some pretty neat applications such aiming through another device: http://www.military.com/video/guns/rifles/trackingpoint-shot...

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That system is impressive. The website has a slightly more explanatory video - I wasn't quite sure what I'd seen from the DARPA link.

So basically the gun has a LIDAR for range, IMU for gun attitude and a Linux computer inside. You tag your target and it will use some kind of machine vision algo to track it even if it moves. You hold down the trigger and it will automatically fire when you put the gun in the right place. It's not truly guided like the parent, so if it's a windy day you're still likely to miss, but under calm conditions you can pretty much guarantee a perfect shot.

http://tracking-point.com/

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