Meta’s $3.5 Billion Bet on the Future of AI Glasses with the World’s Top Eyewear Maker
Meta Platforms Inc. acquired a minority stake in EssilorLuxottica SA, the world’s largest eyewear manufacturer, a move that boosts the US tech giant’s financial involvement in the rapidly expanding smart glasses sector, according to sources familiar with the situation.
Meta, the parent company of Facebook, has acquired nearly 3 percent of EssilorLuxottica, the maker of Ray-Ban, a stake valued at approximately €3 billion ($3.5 billion) based on current market prices, according to sources who requested anonymity due to the private nature of the discussions. Meta, based in Menlo Park, California, is contemplating additional investment that could increase its stake to approximately 5 percent over time, according to sources, although these plans may still evolve. EssilorLuxottica’s American depositary receipts increased by as much as 6.9 per cent to $148, marking their largest intraday rise since April 9.
Meta’s investment in the eyewear giant strengthens the relationship between the two companies, which have collaborated over the past several years to create AI-powered smart glasses. Meta offers a pair of Ray-Ban glasses, which were first introduced in 2021, featuring integrated cameras and an AI assistant. Last month, it introduced distinct Oakley-branded eyewear in collaboration with EssilorLuxottica. EssilorLuxottica Chief Executive Officer Francesco Milleri stated last year that Meta was interested in acquiring a stake in the company, but that plan has not come to fruition until now.
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The deal reflects Meta CEO Mark Zuckerberg’s commitment to AI, a top priority and significant expense for the company. Smart glasses play a crucial role in that strategy. Meta has traditionally relied on competitors’ smartphones to deliver its apps and services. However, glasses present an opportunity for Meta to create its own hardware and manage its distribution, according to Zuckerberg. The arrangement provides Meta with enhanced manufacturing insights and extensive global distribution networks, essential for transforming its smart glasses into mass-market products.
For EssilorLuxottica, the deal enhances its presence in the tech world, which could prove beneficial if Meta’s futuristic bets succeed. Meta is betting on the notion that people will eventually work and play while wearing headsets or glasses. Shares of Warby Parker, a competing glasses-maker, increased by as much as 4.3 percent.
