Meta is expanding its hardware push with AI-powered wearables, including a pendant and workplace wearables, broadening beyond smart glasses and VR headsets.

Reality Labs posted strong revenue of $402 million in the latest quarter but incurred a substantial loss of about $4.03 billion, underscoring the struggle to reach scale and profitability.

The company aims to sell around ten million wearables in the second half of the year to offset Reality Labs’ losses, compared with seven million units sold last year.

During demonstrations, internal data-collection policies were highlighted, with concerns raised over opt-out options for keystroke data, stirring privacy and trust worries among staff and privacy advocates.

Privacy and regulatory scrutiny loom, particularly in the EU, over how ambient recording devices handle footage.

Advertising remains the dominant revenue source at Meta, comprising about 98.7%, with other sources making up the remaining 1.3%.

The information originates from an internal memo reported by The Information and supplemented by Devdiscourse and agency inputs.

Market indicators suggest a paradox: high growth and profitability signals on paper, but low valuation, indicating a potential mispricing and the need for effective execution in hardware turnaround.

A key challenge is achieving user adoption of an always-listening pendant, which hinges on perceived usefulness and trust in data handling.

The broader objective is a seamless service loop where capture, memory, search, recommendations, and task completion reinforce each other, not just a standalone gadget.

May 24 demonstrations mark a shift from secret prototypes to visible hardware efforts, potentially accelerating consumer AR timelines and drawing tighter regulatory and investor scrutiny.

The demo hints at faster feature updates and earlier retail availability for prescription users, while amplifying privacy questions as AI-in-wearable data learning grows.