Meta Turns From Metaverse and Places Big Bet on AI Glasses

Meta is once again redirecting its financial efforts, but this time the shift feels less like chasing a futuristic dream and more like a course correction in response to reality.

After years of pouring billions into building the metaverse, the company is scaling back and shifting parts of that investment toward artificial intelligence-powered smart glasses and wearable devices. 

According to company statements first reported by the BBC, the firm is cutting metaverse spending by as much as 30%, redirecting resources to AI-powered wearables that executives believe have stronger consumer momentum. Investors seemed to approve of the news, as Meta’s shares climbed more than 3% after it broke.

This is a notable moment for a company that reshaped its entire identity around the metaverse just four years ago. Facebook renamed itself Meta in 2021 as CEO Mark Zuckerberg promoted a future built around immersive virtual worlds. But while Meta insists it is not abandoning virtual worlds entirely, the momentum is clearly shifting toward AI, just AI that lives on your face rather than inside a headset.

From virtual worlds to wearable AI

Meta’s renewed focus builds closely on the positive response to its latest generation of AI-enabled smart glasses, including newly launched models featuring a small, embedded display within the lens. Differing from earlier attempts at augmented reality, these glasses are slimmer, more practical, and designed for everyday use. A small display embedded in the lens can describe what the wearer is looking at, translate text in real time, and interact with Meta’s AI assistants.

Unlike bulky VR headsets, smart glasses promise something closer to everyday utility and don’t require users to fully disengage from the physical world. Instead, they enhance the physical world rather than demanding complete immersion, and they do so in a more socially acceptable, lightweight form. 

That practicality matters, especially as rivals in China and Silicon Valley race to define the next dominant wearable platform. While competition is heating up, Meta is taking advantage of its head start, as its early models have gained attention for blending AI features with familiar eyewear brands. The company is positioning the glasses as not just another niche gadget, but as a long-term platform for AI interaction.

Internally, this shift has been reinforced by organizational changes. Executives who once led metaverse and virtual reality initiatives have been reassigned to AI-focused roles, and Meta’s Reality Labs division is now increasingly centered on glasses rather than virtual worlds. Whereas AI was once just a feature, it has now become a strategy these large tech firms are relying on to boost their success.

A pricey AI arms race

Meta’s pivot is also unfolding amid a massive surge in AI spending. The company plans to invest between $70 and $72 billion in capital expenditures in 2025, nearly double last year’s figure. Much of that funding will go toward data centers, chips, and infrastructure needed to train large AI models and deploy them across Meta’s products.

Investors, however, aren’t entirely comfortable with that level of spending. After Meta’s latest earnings call, the stock dropped sharply despite strong financial results, including more than $51 billion in quarterly revenue and 3.54 billion daily active users across its platforms. Free cash flow is expected to drop significantly as Meta plows nearly all of its cash generation back into AI.

Zuckerberg has defended the strategy, arguing that Meta’s core advertising business is performing well and that heavy AI investment now will pay off over time. The idea is that AI will enhance everything from ad targeting to user engagement, and powering entirely new kinds of devices like smart glasses. Meta is far from alone in this gamble, as other big players like Google and Microsoft are also spending tens of billions on AI infrastructure.

Why the metaverse burned bright and faded fast

Just a few short years ago, “metaverse” was one of the hottest terms in tech. Virtual land sales, avatar economies, and digital offices were pitched as the next phase of the internet. It felt like the metaverse hype was everywhere, and then suddenly it wasn’t.

So what happened, anyway? Well, accessibility was one of the main issues slowing down VR adoption. High-quality VR systems remain expensive, and while some enjoyed the tech for gaming and niche use cases, others were deterred by its drawbacks. As someone who has tried virtual reality headsets, I can attest that they can be physically uncomfortable for long sessions, can prompt nausea in inexperienced users, and are fundamentally isolating. Most consumers weren’t eager to spend hours wearing cumbersome headsets for experiences that often felt more like a pricey novelty than a practical necessity.

Another issue was utility, as the use cases for VR systems were vague. Beyond gaming, corporate meetings, and experimental social spaces, the metaverse struggled to deliver everyday value to its users. AI, on the other hand, immediately proved its worth through productivity tools, creative software, and consumer-facing assistants.

The timing of the metaverse launch didn’t help things either. Just as Meta was doubling down on the metaverse, generative AI exploded into the mainstream. Chatbots, image generators, and large language models captured the public’s attention and investor capital almost instantly.

All in all, the metaverse may not have been as much of a wrong endeavor as it was premature. Today, many of the ideas that the metaverse was built on, like digital identity, virtual collaboration, and immersive interfaces, are now resurfacing in more practical forms through AI-driven tools and lightweight wearables.

A more grounded vision of the future

Meta’s current strategy reflects a more pragmatic view of technological adoption and shows that the company has learned a lesson from the entire ordeal. Rather than asking users to escape reality, the company is applying AI in order to enhance it, in a continuous, subtle, hands-free way that fits into their daily lives.

Of course, there will be a risk that the company is repeating history by spending massive amounts ahead of clear monetization. But this time, Meta is working within trends already embraced by consumers, and wearables already have a growing, widespread popularity.

The metaverse may not be dead, but for now, it has been sidelined by a technology that people might actually want to use, with more apparent demand, faster feedback, and more immediate returns. For Meta, the challenge is proving that lessons learned from that expensive detour will make its next big leap a smarter one.

Google has begun rolling out Gemini 3 Deep Think to AI Ultra subscribers, officially bringing its most powerful reasoning mode into the Gemini app. 
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