In the first three quarters of 2025, shipments of smart glasses exceeded 1.78 million units, with nearly 80% being AI glasses. This set of data, recently released by the Ministry of Industry and Information Technology, has undoubtedly boosted the domestic AI glasses industry. In terms of scale, a million units may not seem like a huge number, but compared to the shipment volume of around 200,000 units in 2024, a sixfold increase is still quite remarkable.

Moreover, at the very start of 2026, AI glasses once again dominated headlines, becoming the breakout AI product at CES 2026. There has also been a steady stream of good news on the capital front, with companies such as Thunderbird Innovation, INMO, and XREAL all securing new rounds of funding. With ByteDance and Huawei also set to enter the market this year, AI glasses are poised to accelerate their entry into the public eye. Longcheer Technology, which just went public, believes that the smart glasses sector is expected to maintain strong growth, with a compound annual growth rate of 45.4% from 2024 to 2029. Xie Xin, Vice President of VLight Technology and Chief Software Engineer, went so far as to say, "This year, the market could reach sales in the tens of millions."

However, it ’ s important to note that, given current hardware limitations and the lack of a robust software ecosystem, AI glasses are far from replacing smartphones. Their ultimate form is still a matter of debate, and even issues such as long-term wear have yet to be resolved. Amid the hype, the "battle of a hundred glasses" will continue to play out. The difference this year is that the entry of more major players will accelerate the bursting of the market bubble. For startups, this is a battle with no way out.

Tech Giants Place their Bets

Ever since large AI models began to take center stage more than two years ago, the market has been abuzz with discussions about what the next super device to replace the smartphone might be. However, given the current state of hardware and software ecosystems, smartphones remain the centerpiece of consumer electronics. Even with the emergence of AI devices like the Rabbit R1, they ultimately turned out to be products of their time — more hype than substance.

Compared to innovations in form, AI glasses are seen by many as the next super device after smartphones — not as a replacement, but as a complementary technology. The two will coexist for a long time, each playing a different role. In 2025, China kicked off what is known as the "Hundred Glasses War," joining tech giants like Meta and Google to accelerate the mass adoption of AI glasses. This year, the momentum behind AI glasses continues to build, with significant market activity right from the start.

At CES 2026 in early January, there were more than 50 companies showcasing AI glasses. There were long lines at every booth, whether it was established AI glasses companies in Central Hall or startups in South Hall and the Venetian Expo. One exhibitor even revealed, "Because people couldn't buy them locally, some attendees offered high prices to purchase our display samples."

Amid the buzz at CES, several Chinese brands announced their latest funding updates, with over 1 billion yuan invested in the industry's development. Among them, INMO officially completed its C1 round of financing, with Chengdu Science and Technology Investment, Nanshan Emerging Industry Investment, and Puffin Capital participating. The company is now valued at 2 billion yuan.

Thunderbird Innovation completed a total funding round exceeding 1 billion yuan. The most notable aspect is that it was led by China Mobile's Chain Leader Fund and CITIC Jinshi ( including its subsidiaries Maotai Jinshi and Jinshi Growth Fund ) , with China Unicom's Lianchuang Innovation Fund and other institutions also participating. This marks the first time that China's major telecom operators have jointly invested in the smart glasses sector, signaling that AR devices have officially entered the national communications infrastructure strategy.

XREAL co-founder and CEO Xu Chi revealed in an interview with Bloomberg TV that the company has completed a new $100 million funding round. The main investors include supply chain partners and other undisclosed parties. After this round, the company's valuation has surpassed $1 billion, making it a unicorn enterprise.

As the pace of activity in the capital markets accelerates, more major companies are also rushing to enter the field. Reportedly, the Apple AI glasses may officially debut in the second quarter of this year, positioned as lightweight everyday wearables, offering a wearing experience close to that of regular glasses, similar to Meta ’ s display-free version. Huawei ’ s AI glasses are also set to launch in the first half of the year, supporting photography and featuring HarmonyOS with seamless cross-device collaboration. ByteDance ’ s AI glasses will be released around the Spring Festival, initially targeting partners and other collaborators, with the official launch scheduled after the holiday.

One thing is certain: the entry of Huawei and ByteDance will make the entire AI glasses market more dynamic and will accelerate public awareness and understanding of AI glasses. More importantly, the market is eager to see more diverse solutions and scenario optimizations, rather than monotonous replication. During CES, these topics were discussed at the TMTPost "Talk to the World Forums · Dialogue with the World" series of forums. Daizhao En, CEO of VLight Technology, pointed out that before 2024, the integration of glasses and AI was actually quite weak. For manufacturers like us, the biggest challenge is to stay ahead of consumers and anticipate the best ways to combine AI with our products.

Currently, although the market is hot, product homogenization and core pain points still coexist. AI glasses are generally constrained by the "impossible triangle" of battery life, weight, and performance, resulting in most products being compromises. However, in the past two years, a positive trend has emerged as more technologies and solutions have come to the fore. For example, Goertek Optical and AAC Technologies are focusing on silicon carbide solutions and have already made new progress. VLight Technology has proposed a modular solution, splitting core functions into independent modules that users can combine as needed. In theory, this could allow for future upgrades of only the display module or other components. Its hardware form is a "sustainably upgradable AI glasses" that can switch between basic camera glasses and AR display devices.

At CES 2026, the Xuanjing M6 series was also showcased and launched, featuring the basic AI camera glasses M6 Air and attachable magnetic single-green or full-color display modules ( Mini AR screens ) . Users can switch between regular smart glasses and AR display devices as needed, enabling a combination of functions. Xuanjing Vice President Xie Xin stated that this move aims to address users' diverse needs of "wanting it all," rather than forcing them to choose between single categories such as audio, photography, or display. "We will stick to modularity, but at the same time, we want to give users more choices and put the decision in their hands — we won ’ t force users to go modular," he said.

Physical AI Concept  

With the rising popularity of the physical AI concept, not only has the role of traditional devices been redefined, but most brands have also shifted their strategies — cross-industry expansion into AI glasses and similar devices has become a trend. In addition to the product-side innovations and new perspectives mentioned above, external factors have also played a key role in fueling this year ’ s explosive growth of AI glasses.

On one hand, consumer attitudes are changing. As the younger generation becomes the new mainstream consumers, the market is shifting. According to a "Consumer Insights" report previously released by Zhuanzhuan Group, the post-2005 generation, driven by interest-based consumption, has rapidly emerged as a major consumer force. They are more open to new products and even willing to try trendy second-hand items. In 2025, the average transaction value per person among post-2005 consumers increased by 20% year-on-year, demonstrating strong purchasing power and a greater willingness to pay for "self-rewarding consumption." In addition to their technological appeal, AI glasses are also stylish to wear, which, combined with the consumption habits of the post-2005 generation, to some extent lowers the cost of user education.

On the other hand, national policies have provided new support this year. Under the new "national subsidy" policy, smart glasses have, for the first time, been included in the nationwide subsidy program alongside smartphones, tablets, and other digital smart products, with a maximum subsidy of 500 yuan. Currently, AI glasses without displays are generally priced around 2,000 yuan. Several industry insiders told the author that a 500-yuan subsidy could significantly stimulate consumer demand.

"Only when sales volumes increase will costs drop more quickly. This year ’ s strong government policy support, coupled with increasingly mature products, will definitely push sales to new heights," an AI glasses distributor told the author. As for costs, Dai Zhao ’ en also has deep insights, stating, "Regardless of the technical path, what consumers ultimately want is newer, faster, more convenient, and lower-cost technology. Any innovation that goes against this demand must consider commercial viability."

Speaking of this, it ’ s necessary to mention the industry debate around optical engines. There are two schools of thought in the industry: dual optical engines versus single optical engines. Of course, dual optical engines can deliver a richer display and experience, but given current technology and cost constraints, some brands are opting for the more practical single optical engine solution. According to Xuanjing product expert Chen Kai, the yield rate for dual optical engines is a common challenge across the industry, and this challenge ultimately translates into higher costs for users. Moreover, the biggest advantage of dual optical engines lies in providing stereoscopic depth for 3D displays, but in current calibration scenarios, this depth perception does not yet offer a better experience or additional value.

In the first half of the AI glasses race, controversy is inevitable. Meta has packed in a lot of features for the user experience, but has also made some compromises. Amid these changes, Chinese supply chains are leveraging both technological and cost advantages to overtake competitors on the curve.

The optical module, chip, and display unit make up the three core value areas of AI glasses. At present, China has built a vast innovation ecosystem covering optics, acoustics, and complete device manufacturing, with a vibrant industrial landscape. According to the China Academy of Information and Communications Technology ( CAICT ) , Chinese AI glasses brands are accelerating their global influence, rapidly gaining ground in international markets thanks to their accumulated supply chain efficiency, cost control, and agile hardware-software iteration capabilities in the consumer electronics sector.

One obvious fact is that more Chinese AI glasses are now using domestic chips, such as those from UNISOC and Bestechnic, and are performing quite well. "There ’ s no 100% perfect answer to whether you should use Qualcomm or domestic chips. Every choice is a trade-off based on your intended use. Qualcomm has its strengths, but also some disadvantages in terms of commercialization and cost for 3C products, including issues with coordination and supply bottlenecks," said Chen Kai.

In addition, at CES, Chinese supply chain companies like Goertek and Lens Technology showcased their latest technical solutions, stepping into the spotlight to drive the rapid commercialization of the AI glasses industry. A representative from Lens Technology told the author that the company already has mature production lines for AI glasses and is cooperating or planning to cooperate with multiple terminal brands, and will continue to ramp up efforts this year.

Not long ago, Shanghai Conant Optical Co., Ltd. announced that its wholly-owned subsidiary Asahi Lens had officially signed a joint venture agreement with Goertek Optics, declaring the establishment of Goertek Guangshi Technology ( Hong Kong ) Limited. The new company will focus on the R&D, production, and sales of core optical components for AI/AR/VR/MR glasses. Goertek Optics holds a 70% stake, further highlighting its commitment to the XR sector.

The Long Haul of AI Glasses

From the upstream supply chain to the enthusiastic participation of end-product manufacturers, the surging momentum of the AI industry is evident everywhere. However, it ’ s important to recognize that AI glasses are still quite far from their true "iPhone moment." This has never been a race that can be won by a head start; it ’ s a long-term battle. Xu Wu, investment partner at ZhenFund, believes this year is the most challenging for XR in the coming decade, as the old cycle is ending and a new one is about to begin.

The reason for this is not hard to understand. A mature AI device requires not only robust hardware but also a complete application ecosystem. Currently, the software experience of AI glasses remains at a very early stage — they still rely heavily on the computing power of smartphones, and their interaction efficiency is far from ideal. Hao Dongning, General Manager of the R&D Center at Xuanjing Software, believes that in the future, it should not be people adapting to machines, but machines adapting to people — what ’ s needed is collaborative intelligence.

And the starting point for software is determined by hardware, which itself is a complex, systematic project. "The track is long, and the short-term market potential is not as big as imagined. You can ’ t seize huge growth just by being first; in the long run, it ’ s about whether you can endure. We ’ re still a long way from true AI glasses — don ’ t get misled by the hype. The real bottleneck isn ’ t just display, but the entire system: chips, power consumption, heat dissipation, and weight. This is a decade-long journey," Xu Wu said.

With major companies like Xiaomi, Alibaba, ByteDance, and Huawei entering the field, their OS and ecosystem advantages will accelerate the iteration of the AI glasses industry chain. At the same time, these tech giants have deeper pockets, making the track even more crowded. On this, Hao Dongning believes that big companies moving into the AI glasses sector is actually a very positive thing, as it significantly raises the market ’ s overall attention. While the advantages of large companies are obvious, as an innovative startup, there is greater freedom and flexibility.

Everyone is essentially starting from the same line. Who understands users better — that ’ s the key. We hope to create glasses that score 90 points for a certain group of people, even if they only score 10 points for the majority. As long as we can serve a specific group well, we can differentiate through product lines, scenarios, and by combining hardware forms with software experiences to serve different types of users.

In conversations with several AI glasses founders, their views generally align with the above: big companies are indeed strong, but by focusing on the right vertical scenarios, startups can still carve out their own space. Unlike foreign companies that are keen to define the market in the early stages, Chinese companies are more accustomed to entering after the market matures in the later stages. This is because the Chinese market is large enough, and once the supply chain matures, giants have the resources to wage market wars. By then, most startups will have been replaced. Take the smartphone industry as an example — among emerging startups, only Xiaomi truly made it from zero to one.

Judging from the current and upcoming AI glasses projects announced by major companies, most treat AI glasses as a novelty or experimental project. Even if it fails, it ’ s not a big deal — they can withdraw at any time if interim evaluations don ’ t meet expectations. Recently, there were reports that vivo has halted its AI glasses project.

As for the current domestic AI glasses market, most of the innovation still depends on startups. Precisely because they are all in, with no Plan B, there ’ s no way out. This is also a key reason why the industry will remain vibrant for quite some time. XREAL founder Xu once told the author, "We are still in the early stages of industry development. In such a harsh environment, the conditions for producing a batch of successful companies at scale simply don ’ t exist. I need to stand at the top of the value chain to have a chance to break out of the industry — this might even be the only way to survive."

The advantages of major tech companies lie in their channels, ecosystems, and ability to scale and replicate. However, as the competition for physical AI acceleration heats up, what China lacks is a giant like Meta — one that can consistently invest in emerging fields such as XR from start to finish, rather than relying on startups to blaze the trail in the early stages and then stepping in to reap the rewards in the later stages.