Former OpenAI executive Fidji Simo warned staff the company risked missing its moment by chasing "side quests" like Sora. Now Bloomberg reports OpenAI's first hardware device will be a "humanlike" rechargeable smart speaker with a camera, sensors, and GPT-Live-1 voice model. Jitesh Ubrani of IDC says the smart speaker market is shrinking: shipments fell 16.3% in 2023, 11.8% in 2024, and 6.7% in 2025, with another 9.6% drop projected this year before flatlining. Most U.S. consumers aren't upgrading because features are cloud-based, and usage remains basic — music, timers, podcasts.

Ubrani doubts OpenAI can reach mass scale against entrenched players like Amazon. The rumored device sounds far pricier than the sub-$100 speakers that sell best. Amazon's Alexa+ failed to revive its market, and its Worldwide Digital unit lost $3 billion in Q1 2022 alone. OpenAI itself lost $5.09 billion in 2024 and $38.5 billion in 2025, with profitability not expected until 2030.

Ubrani concedes hardware may be necessary for AI to "understand the world," and a speaker is the lowest-resistance entry point. But Meta's Portal failure and OpenAI's deep losses suggest this side quest could deepen the financial hole.