Meta Has Lost $80 Billion Trying to Make Wearables the Next Smartphone

Meta’s Reality Labs division has accumulated more than $80 billion in operating losses since late 2020, underscoring the enormous cost of Chief Executive Mark Zuckerberg’s long-term bet on virtual reality, augmented reality and AI-powered wearable devices.

The unit posted an operating loss of $4.62 billion in the second quarter, while generating revenue of $431 million, up from $370 million a year earlier, Meta said on Wednesday. Analysts polled by StreetAccount had expected revenue of $423.4 million and an operating loss of $5.07 billion.

The latest quarterly loss widened from $4.53 billion a year earlier and followed a $4.03 billion operating loss in the first quarter of 2026, extending a string of multibillion-dollar deficits as Meta continues to invest heavily in technologies Zuckerberg sees as the next generation of computing.

Reality Labs develops Quest virtual reality headsets, Ray-Ban Meta smart glasses and augmented reality technologies. Meta has poured billions of dollars into research and development, custom chips, artificial intelligence infrastructure, software and hardware development, while revenue from device sales has remained relatively modest.

Meta has increasingly shifted its Reality Labs strategy toward AI-powered wearables after its Ray-Ban Meta smart glasses, which start at about $299 in the United States, proved more commercially successful than its virtual reality headsets. Earlier this year, the company cut jobs in Reality Labs as it redirected resources from some virtual reality projects to AI wearables.

The glasses, developed with eyewear maker EssilorLuxottica, allow users to take photos and videos, make calls and interact with Meta AI through voice commands. Their growing popularity has made them one of Meta’s strongest consumer hardware products, but they have also attracted scrutiny from European privacy regulators and advocacy groups over data collection, recording in public places and the handling of users’ voice and image data.

Despite the continued losses, Reality Labs’ second-quarter operating deficit was smaller than analysts had expected.

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