Meta’s total investment in virtual and augmented reality will exceed $100 billion this year, and its CEO Mark Zuckerberg said that 2025 will be a «definitive year» for its smart glasses.
Meta’s total investment in virtual and augmented reality will exceed $100 billion this year, and its CEO Mark Zuckerberg said that 2025 will be a «definitive year» for its smart glasses.
In its latest annual report, Meta revealed that it invested $19.9 billion in its Reality Labs unit last year, a new high after more than a decade of heavy losses. The unit develops Ray-Ban Meta «smart» glasses, which Zuckerberg last week called a «real hit,» as well as Quest VR virtual reality headsets, which are selling more slowly. The company has sold 1 million sets of Ray-Ban glasses in 2024, the FT reported, citing sources.
According to analysts' estimates and the publication’s calculations, Meta’s cumulative investments in the development and acquisition of VR and AR products have exceeded $80 billion since it acquired VR headset manufacturer Oculus in 2014.
Meta’s annual report says that the division’s annual investment is expected to continue to grow in 2025, meaning that more than $20 billion will be added to that amount this year.
This shows Meta’s high hopes for the technology, which could reduce its dependence on Apple and Google devices to distribute its apps and services in the future. It was previously reported that the company is developing its latest augmented reality glasses, Orion, which overlay content on the real world, but its competitors Apple and Google are working on similar products.
«Meta’s investment in Reality Labs is impressive, but it’s not clear whether it’s unreasonable if you believe it can build a business that will replace iOS,» said Matthew Ball, a technology investor and author of The Metaverse.
Three years after parent company Facebook rebranded itself as Meta to emphasize its vision of building a «metaspace,» or virtual world on the internet, Reality Labs’ revenue in 2024 was $2.1 billion, up 13% from the previous year. Last year, its operating loss hit a new high of $17.7 billion, up 10% from the previous year.
Over the past year, Zuckerberg has shifted his focus from talking about creating a metaspace filled with avatars to touting progress in developing smart glasses powered by artificial intelligence technology. On Wednesday, during a Meta call, he spoke enthusiastically about the prospects of «AI glasses,» which are being made in partnership with Ray-Ban parent company EssilorLuxottica.
«This will be a defining year that will show whether we are on the path to many hundreds of millions and eventually billions of AI glasses, and whether glasses will become the next computing platform we have been talking about for some time, or whether it will just be a longer grind», — he said.
The lightweight glasses are equipped with tiny cameras, microphones, and speakers that allow the wearer to take photos, listen to music and communicate with artificial intelligence. Meta plans to release a new version later this year that will feature a small display for the first time.
Ball said Meta’s losses from VR and AR, which are in the tens of billions of dollars, are not dissimilar in scale to other efforts by big tech companies trying to enter new product categories. He compared it to Microsoft and its Bing search engine, Amazon’s Alexa assistant and Echo devices, and Google’s cloud computing division.
He estimates that Meta Reality Labs' combined operating losses are currently $75 billion, compared to more than $50 billion for Amazon’s Alexa and more than $30 billion for Apple’s VR and AR developments, including the Vision Pro, a much more expensive competitor to Meta’s Quest.
Meta’s investment in Reality Labs is smaller than the «hundreds of billions of dollars» that Zuckerberg has said he plans to spend on AI infrastructure «over the long term,» Ball said. Meta CEO Mark Zuckerberg recently announced that his company would build a data center in Louisiana the size of Manhattan Island. He said 2025 would be a «definitive year for AI,» and that Meta would spend an additional $60 billion to $65 billion on AI development.
Despite such large capital expenditures, Meta remains highly profitable thanks to its lucrative online advertising business. The company’s net income grew 60% last year to $62.4 billion.
It was previously reported that the company plans to develop smart glasses for athletes under the Oakley brand. The Reality Labs division, which develops the devices, also plans to release new high-end glasses with a built-in display in 2025.
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