Meta Cuts Metaverse Spend as It Bets on AI Glasses and Wearables

Core Insights - Meta is significantly reducing its metaverse spending and reallocating resources towards AI-powered glasses and wearable devices, marking a major strategic shift for the company [1][4]. Group 1: Strategic Shift - The decision to cut metaverse spending comes amid growing investor skepticism regarding the long-term commercial viability of virtual worlds and VR headsets [2]. - Meta has invested over a decade and billions into the metaverse, which was central to CEO Mark Zuckerberg's vision, leading to the company's rebranding from Facebook to Meta in 2021 [3]. - The flagship VR platform, Horizon Worlds, has struggled with user retention, and sales of VR headsets have not justified the scale of investment [4]. Group 2: Financial Impact - Meta plans to reduce metaverse spending by up to 30%, which positively impacted its stock, causing shares to rise over 3% [4]. - The company is not planning broader changes or layoffs in metaverse-focused teams, indicating a strategic pivot rather than a complete overhaul [5]. Group 3: Focus on AI Wearables - Meta is shifting its focus to wearable AI devices, particularly a new line of smart glasses launched in September, which have seen stronger-than-expected demand [5]. - The latest smart glasses feature an on-lens display that can describe surroundings, identify objects, and translate text, representing a successful blend of AI assistance with hardware [6]. - This pivot aligns with broader industry trends, as companies in the US and China are racing to develop AI-enabled glasses and compact wearables, suggesting a shift in consumer preference towards lightweight, always-on assistance [6][8].