Meta (NASDAQ : META) has snapped up just under 3% of EssilorLuxottica for a cool US$3.5 billion, doubling down on its AI-powered smart glasses ambitions as the tech giant looks to control more of its hardware pipeline.
The deal puts meat on the bones of CEO Mark Zuckerberg's commitment to AI, which has become a top priority and major expense for the company.
Sources suggest Meta is eyeing further investment that could bump that stake to around 5% over time, though those plans remain fluid.
The investment is a shrewd and calculated move to secure Meta's position in the rapidly heating up smart glasses market via some of its biggest brands.
Meta and EssilorLuxottica first teamed up in 2019, producing two generations of Ray-Ban Meta smart glasses.
The first generation, Ray-Ban Stories, launched in September 2021, whilst the second generation debuted in October 2023.
The partnership has proved lucrative, with the companies shifting 2 million pairs of Meta Ray-Ban glasses since late 2023.
EssilorLuxottica CEO Francesco Milleri said in February he aimed to ramp up annual production to 10 million units by the end of 2026.
The tie-up has expanded beyond Ray-Ban, with the two companies announcing plans last month to release versions under Oakley and Prada brands.
The market for smart glasses is expected to balloon to $8.26 billion by 2030 from $1.93 billion in 2024, according to GrandView Research.
Competition cranking up
Google announced in May that it is committing $150 million to develop AI glasses in partnership with Warby Parker, with plans to launch the first pair after 2025.
Apple is also reportedly working on its first pair of smart glasses to be released by the end of 2026.
For EssilorLuxottica, the deal provides deeper access to the tech world - particularly valuable if Meta's ambitious wearables bets pay off.
Shares of EssilorLuxottica jumped 5.8% following reports of the deal.