Meta preparing AI Pendant as Reality Labs losses top $4 billion

Meta is reportedly preparing to test an AI-powered pendant as part of its latest push into wearable devices. The move comes as the company looks to grow its hardware business after Reality Labs reported a $4.03 billion quarterly loss.

In Short

• Meta is said to begin testing an AI pendant within the next year
• Reality Labs posted a $4.03 billion loss on $402 million revenue in Q1
• Meta aims to sell 10 million wearable devices in the second half of 2026

Meta appears to be doubling down on wearable technology despite continuing losses in its hardware business. According to a new report, the company is preparing to test an AI-powered pendant next year as part of a broader strategy to expand its presence in the growing AI wearables market.

The reported plans come at a time when Meta is under pressure to prove that its massive investments in hardware and artificial intelligence can eventually translate into a profitable business. The company's Reality Labs division, which oversees products such as smart glasses and virtual reality headsets, reported a loss of more than $4 billion in the first quarter of the year while generating only $402 million in revenue.

According to The Information, which cited an internal memo, Meta plans to begin testing an AI pendant in 2027. The device is expected to become part of the company's wider wearable ecosystem, which already includes AI-powered smart glasses developed in partnership with eyewear giant EssilorLuxottica under the Ray-Ban and Oakley brands.

The memo, reportedly written by Meta Vice President of Wearables Alex Himel, also outlines plans to significantly expand the company's lineup of AI glasses. Meta is said to be working on a new business-focused offering called "Wearables for Work," suggesting that the company sees opportunities beyond consumer devices.

The AI pendant project is particularly noteworthy because it builds on Meta's acquisition of AI wearable startup Limitless last year. The startup is known for developing a pendant-style device capable of recording, transcribing and organising real-world conversations using artificial intelligence. The acquisition was seen as a move to accelerate Meta's ambitions in next-generation AI hardware, and the new report suggests those plans are now moving closer to reality.

Meta reportedly has ambitious sales goals for its wearable business. The company is aiming to sell 10 million wearable devices during the second half of 2026 by launching new products and expanding availability across more markets. If achieved, that would represent a major step forward for Meta's hardware division, which has struggled to justify the billions of dollars being invested into it.

AI spending continues as Meta searches for new revenue streams

The wearable push comes alongside Meta's AI spending spree. The company recently increased its 2026 capital expenditure forecast to between $125 billion and $145 billion as it races to build the infrastructure needed for advanced AI services, according to CNBC. While Meta continues to generate strong revenue from advertising, investors have increasingly questioned whether such heavy spending will deliver meaningful returns.

During Meta's annual shareholder meeting this week, CEO Mark Zuckerberg acknowledged that the company could even explore entering the cloud computing market if it ends up building more computing capacity than it needs for its own AI projects.

"It's definitely on the table," Zuckerberg said when asked whether Meta could compete with cloud giants such as Amazon and Microsoft.

He added that external companies frequently approach Meta seeking access to computing resources or AI services. However, Zuckerberg said Meta currently expects to use most of its computing power internally.

"We haven't done that yet because we think that we have a use for the compute," Zuckerberg said. "Obviously if we get to a point where we feel that we have overbuilt, then that is an option that we have."

At the same time, Meta is beginning to explore ways to make money from its AI products. The company recently announced plans to test subscription tiers for its Meta AI app and website, with monthly plans priced at $7.99 and $19.99 in select markets. Zuckerberg has also suggested that premium AI assistants and advanced AI services could become paid offerings in the future.

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