Meta's $100 Billion Bet on AR/VR: Shaping the Future of Smart Glasses and AI

Meta Bets Big on Future of Smart Glasses and AI, Outspends Apple and Amazon on AR/VR - Meta Platforms (NASDAQ:META)

Meta boosts Reality Labs spending past $20B in 2025, aims to cut reliance on Apple and Google devices Meta' Platforms Inc's META aggregate investment in virtual and augmented reality will likely surpass $100 billion in 2025, coinciding with CEO Mark Zuckerberg hailing 2025 as significant for its smart glasses. The Financial Times reported, citing unnamed sources familiar with the matter, that the company sold 1 million sets of its Ray-Ban glasses in 2024. Meta's investment in VR and AR product development and acquisitions has topped $80 billion since it launched the initiative in 2014, per the Financial Times. Also Read: Taiwan Bans DeepSeek AI Over Security Concerns, Joins Global Scrutiny of Chinese Tech Meta invested $19.9 billion in its Reality Labs division in 2024, developing its Ray-Ban Meta smart glasses. Tech investor Matthew Ball estimates Meta's total investment in Reality Labs to be $85 billion, compared with over $40 billion for Amazon.Com Inc's AMZN Alexa and $20 billion-$30 billion for Apple's development of its Vision Pro headset. Three years after Facebook's parent company rebranded itself as Meta, Reality Labs had revenue of $2.1 billion in 2024 with operating losses of $17.7 billion. Reality Labs has generated $10.1 billion in revenue since 2019, the first year Meta started disclosing financial results for the unit. Last week, Zuckerberg expressed conviction about its Ray-Ban Meta smart glasses and Quest VR headsets. Meta expects the division's annual investments to increase by over $20 billion in 2025 as Zuckerberg targets a new computing platform that could reduce Meta's dependence on Apple Inc's AAPL and Alphabet Inc GOOG GOOGL Google's devices for distribution of its apps and services. It is worth noting that Meta's first significant layoff in 2022, affected 11,000 employees, citing a post-pandemic slowdown. In 2023, Meta slashed an additional 10,000 jobs. Wall Street analysts raised their price forecast on Meta after its quarterly print, expressing optimism over its AI investments, Llama upgrades, and ad tech. Price Action: META stock is up 1.53% at $699.72 at the last check on Monday. Also Read: Apple And Tesla Supplier STMicroelectronics Plans Up to 3,000 Job Cuts in Italy and France Photo by Yuganov Konstantin via Shutterstock METAMeta Platforms Inc$698.971.42%Overview Rating:Speculative50%Technicals Analysis660100Financials Analysis400100WatchlistOverviewAAPLApple Inc$226.83-3.89%AMZNAmazon.com Inc$238.690.43%GOOGAlphabet Inc$204.38-0.59%GOOGLAlphabet Inc$202.84-0.58%Market News and Data brought to you by Benzinga APIs

Meta sinks more than $100bn into virtual reality and smart glasses bet

Meta's total investment in virtual and augmented reality is set to top $100bn this year, as its chief executive Mark Zuckerberg has declared 2025 will be a "defining year" for its smart glasses. In its latest annual report, Meta revealed it invested $19.9bn in its Reality Labs division last year, hitting a new high after more than a decade of heavy losses. The unit develops its Ray-Ban Meta smart glasses, which Zuckerberg last week called a "real hit", as well as its Quest VR headsets, which have been slower to take off. The company sold 1mn sets of its Ray-Ban glasses in 2024, according to a person familiar with the matter. The Silicon Valley-based company's cumulative investment in VR and AR product development and acquisitions has now exceeded $80bn since the initiative began in 2014 when it bought VR headset maker Oculus, according to analyst estimates and the Financial Times' calculations based on company disclosures. Meta's annual report said it expected the division's annual investments to increase further in 2025, suggesting that more than $20bn would be added to that total this year. The figures show the extraordinary cost of Zuckerberg's long-term effort to build a new computing platform that could one day replace smartphones and reduce Meta's dependence on Apple's and Google's devices for distribution of its apps and services. As part of this, Zuckerberg is racing to develop more sophisticated AR glasses that overlay content on to the real world, unveiling its prototype Orion in September as rivals Apple and Google work on similar products. "Meta's investments in Reality Labs are eye watering, yet it's not clear if they are unreasonable if you believe it can build the business that it's looking to be, which is replacing [Apple's] iOS," said Matthew Ball, a tech investor and author of The Metaverse. Meta declined to comment. Three years after Facebook's parent company rebranded itself as Meta to highlight its vision of building a "metaverse", or online virtual world, Reality Labs brought in $2.1bn in revenue in 2024, up 13 per cent on the previous year. Its operating losses hit a new high of $17.7bn last year, up 10 per cent. Reality Labs has generated $10.1bn in revenue since 2019, the first year that Meta started to disclose financial results for the unit. Over the past year, Zuckerberg has shifted focus away from talking about creating an avatar-filled metaverse to touting its progress in developing smart glasses powered by rapidly developing AI technology. In Meta's earnings call on Wednesday, Zuckerberg was enthusiastic about the outlook for its "AI glasses", which are produced in partnership with Ray-Ban's parent company EssilorLuxottica. "This will be a defining year that determines if we're on a path towards many hundreds of millions and eventually, billions of AI glasses, and glasses being the next computing platform like we've been talking about for some time -- or if this is just going to be a longer grind," he said. The lightweight glasses have tiny cameras, microphones and speakers built in, allowing the wearer to take photos, listen to music and chat with an AI assistant. Meta is planning to release a new version of its smart glasses later this year that feature a small display for the first time, the Financial Times has previously reported. Its Quest VR headsets, which cost $300 and up for the latest model, are still struggling to achieve mainstream appeal, with analysts and games developers estimating it has sold about 30mn units to date. Zuckerberg said the number of people using its Quest devices and Horizon operating system "has been steadily growing". Ball said Meta's long-term investment of tens of billions of dollars into VR and AR was not dissimilar in scale to other efforts by Big Tech companies to enter new product categories, comparing it to Microsoft's Bing search engine, Amazon's Alexa assistant and Echo devices, and Google's cloud computing unit. He estimates Meta's total investment to date in Reality Labs to be $85bn, compared with more than $40bn for Amazon's Alexa and $20bn-$30bn for Apple's development of its Vision Pro headset, a more expensive rival to Meta's Quest. "A lot of attention is paid to Zuckerberg's bet on Reality Labs but that is partly because they choose to discretely report it," Ball said. "All of their competitors have investments that are comparable that they don't surface." Meta's Reality Labs investments are smaller than the "hundreds of billions of dollars" that Zuckerberg said he planned to spend on AI infrastructure "over the long term". Despite these capital-intensive efforts, Meta remains highly profitable, thanks to its lucrative online advertising business. Net income grew by 60 per cent last year to $62.4bn.

Meta Smart Glasses Spending Approaches 'Eye-Watering' $100 Billion | PYMNTS.com

Meta's investments in virtual and augmented reality projects could reportedly exceed $100 billion this year. This spending comes as CEO Mark Zuckerberg sees 2025 as the "defining year" for the company's smart glasses, the Financial Times (FT) reported Monday (Feb. 3). Meta last year invested nearly $20 billion in its Reality Labs unit last year, the report said, citing Meta's annual report. That figure follows more than a decade of heavy losses and represents a new record in the lab's spending, the report adds. Reality Labs makes Ray-Ban Meta smart glasses, which Zuckerberg last week called a "real hit," as well as its Quest VR headsets, which have been slower to catch on. A source told the FT Meta said 1 million sets of Ray-Bans last year. So far, the company's virtual reality (VR) and augmented reality (AR) spending has topped $80 billion since 2014, the year Meta purchased VR headset maker Oculus, the FT said, citing analyst estimates and its own calculations based on company disclosures. This year, the company will add more than $20 billion to that figure, the report adds. The FT notes this is part of Zuckerberg's long-term plan to develop a computing platform that could replace smartphones and lessen his company's reliance on Apple and Google to distribute its apps and services. "Meta's investments in Reality Labs are eye watering, yet it's not clear if they are unreasonable if you believe it can build the business that it's looking to be, which is replacing [Apple's] iOS," Matthew Ball, a tech investor and author of "The Metaverse," told the FT. The news follows reports from last week that Apple was shelving its smart glasses project following the tepid reaction to its virtual reality headset last year. Zuckerberg has also called this a "defining year" for Meta's artificial intelligence (AI) work, with plans to invest $60 billion to $65 billion in the effort this year. Writing on Facebook earlier this month, the CEO said Meta is building a data center big enough to cover "a significant part of Manhattan," will bring online 1 gigawatt of compute and will have more than 1.3 million GPUs by the year's end. "This is a massive effort, and over the coming years it will drive our core products and business, unlock historic innovation, and extend American technology leadership," Zuckerberg wrote.