Meta invests US$3.5 billion in world’s largest eyewear maker in AI glasses push

[SAN FRANCISCO] Meta Platforms bought a minority stake in the world’s largest eyewear maker EssilorLuxottica, a deal that increases the US tech giant’s financial commitment to the fast-growing smart glasses industry, according to sources familiar with the matter.

Facebook parent Meta acquired just under 3 per cent of Ray-Ban maker EssilorLuxottica, a stake worth around three billion euros (S$4.5 billion) at the current market price, said the sources, who asked not to be identified because deliberations are private. Menlo Park, California-based Meta is considering further investment that could build the stake to around 5 per cent over time, the sources added, though those plans could still change.

EssilorLuxottica’s American depositary receipts rose as much as 6.9 per cent to US$148, their biggest intraday jump since Apr 9. Representatives for Meta and EssilorLuxottica declined to comment.

Meta’s investment in the eyewear giant deepens the relationship between the two companies, which have partnered over the past several years to develop artificial intelligence (AI)-powered smart glasses. Meta currently sells a pair of Ray-Ban glasses, first debuted in 2021, with built-in cameras and an AI assistant.

Last month, it launched separate Oakley-branded glasses with EssilorLuxottica. EssilorLuxottica chief executive officer Francesco Milleri said last year that Meta was interested in taking a stake in the company, but that plan had not materialised until now.

The deal aligns with Meta CEO Mark Zuckerberg’s commitment to AI, which has become a top priority and major expense for the company. Smart glasses are a key part of that plan.

While Meta has historically had to deliver its apps and services via smartphones created by competitors, glasses offer Meta a chance to build its own hardware and control its own distribution, Zuckerberg has said. The arrangement gives Meta the advantage of having more detailed manufacturing knowledge and global distribution networks, fundamental to turning its smart glasses into mass-market products.

For EssilorLuxottica, the deal provides a deeper presence in the tech world, which would be helpful if Meta’s futuristic bets pay off. Meta is also betting on the idea that people will one day work and play while wearing headsets or glasses.

Shares of Warby Parker, a competing glasses-maker, rose as much as 4.3 per cent on Bloomberg’s report. BLOOMBERG