Mark Zuckerberg announced that Reality Labs will eventually reduce its massive losses. The Meta CEO expects the peak losses to occur this year, with a gradual decline afterward. This shift follows significant layoffs and a refocusing of investments toward AI glasses and wearables. The company lost over $19 billion in 2025 alone, prompting a strategic pivot.

Zuckerberg's statements came during Meta's fourth-quarter earnings call. He emphasized a move away from virtual reality and toward making Horizon a success on mobile. Sales of Meta's smart glasses more than tripled in 2025, signaling growing consumer interest. The company is betting on AI-powered glasses that can interact with the wearer's environment.

This strategic shift follows the closure of VR studios and the pause of third-party Horizon OS headsets. Meta is clearly prioritizing its AI glasses and wearables business, aligning with Zuckerberg's vision for AI. The focus on AI suggests a longer-term strategy. The tech giant's investment in this area is a signal of the future for the industry.

The industry is closely watching Meta's moves, as the success of AI glasses could reshape the consumer tech market. Competitors like Apple are also rumored to be developing their own AR/VR products. The next few years will be critical in determining whether Meta's approach can deliver a profitable and innovative future.