Meta plans to cut up to 30% of its 2026 metaverse budget. The press salivating over this one, because shadenfreude tastes sooooo good. Everyone has been saying, for years at this point, if Meta chucked the whole experiment aside, even the modestly successful part, the stock price would go up. Maybe a lot. This is a significant reversal, but Reality Labs’ head Andrew Bosworth did say this was a “make or break” year, and I don’t see much ‘make.’ We know they like a big ‘break’ there. So. The company is reallocating money and staff toward AI, especially agent based features for messaging, search, creation tools, and commerce. The move highlights how AI, not VR, now drives Meta’s product roadmap, executive focus, and capital allocation decisions.
Black Forest Labs raised $300 million at a $3.25 billion valuation. Salesforce Ventures and AMP led the round with participation from Nvidia, a16z, Temasek and existing backers. Black Forest Labs builds the Flux family of image generation models, which power creative and commercial workflows and integrate with platforms like Adobe and Canva. Flux Two introduces four K output, multi image reference and stronger consistency controls. The company plans to use the new capital for research, infrastructure and expansion as competition in visual AI intensifies.
Google To Showcase for Android XR December 8th. The event is expected to reveal new glasses and headsets built on Qualcomm’s latest chips and tightly integrated with Gemini. Google has been signaling that Android XR will unify phones, wearables, and ambient agents into a single spatial layer. This marks Google’s most visible push into XR since the Pixel Tablet and early ARCore experiments, reflecting a renewed ambition to compete with Meta, Samsung, and Apple in spatial hardware and software.
Alibaba introduced the Quark AI Glasses in China. They’re launching two models, the S1 and the cheaper G1. The S1 costs ~$540 and includes dual green micro displays, a Snapdragon AR1 chip, swappable batteries, bone conduction audio, a three K camera upscaled to four K, and on device AI through Alibaba’s Gwen model. It weighs roughly eighty grams. For half the price, the G1 costs ~$270 and drops the displays but keeps the camera and AI functions. Both support translation, navigation, shopping and visual search.
The Axe Falls on Agency Creatives. Omnicom is cutting about 4,000 jobs as it folds IPG into a single, AI and data centered super network, retiring legacy creative brands. Dentsu is also restructuring, eliminating roughly 3,400 roles worldwide, about 8 percent of its global workforce. Put together, you have two of the biggest holding companies shrinking headcount at scale in the same year, with management explicitly tying consolidation and cost cuts to automation, data platforms and AI driven production models. When the ship of commerce runs into story weather, it’s the consultants and marketers thrown overboard first.
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Executive Musical Chairs.
Apple named Amar Subramanya its new AI chief, replacing John Giannandrea, who will retire in 2026. Subramanya previously worked on Google Assistant and later held senior AI roles at Microsoft. He now reports to Craig Federighi and is responsible for Apple’s foundation models, on device intelligence, and the broader Apple Intelligence roadmap. The shift comes during a slow rollout of Apple Intelligence features and ongoing pressure to match competitors in conversational agents and model performance. Apple continues to emphasize privacy focused AI that runs locally on its devices rather than cloud dependent systems.
Meta hired longtime Apple design leader Alan Dye to head a new creative studio inside Reality Labs. Reality Labs? Didn’t we just hear that’s being consolidated? Just when you thought Meta would get out of the hardware game, where it’s gotten its ass kicked, they double down on a design lab for fashionable, Apple-y, devices. Dye spent over twenty years at Apple, including leadership roles on the design of iOS, watchOS, and hardware products. Dye will oversee spatial interfaces, industrial design language, and the look and feel of forthcoming wearables. His arrival is seen as a recruitment win for Meta, but rumors, which rarely leave Apple, suggest many will welcome new leadership.
Rocco Basilico, the executive who oversaw wearables at EssilorLuxottica, is leaving the company in January. Basilico helped manage partnerships with Meta along with the internal development of camera enabled eyewear under the Ray Ban brand. His exit comes during a period of restructuring within the company as it tries to balance its traditional eyewear business with rising demand for smart glasses. Earlier this year, Meta bought 5% of the Italian eyewear maker. I’m going to go out on a limb here and say with Alan Dye departure, there may be an opening at Apple.
This column has a companion, The AI/XR Podcast, hosted by its author, Charlie Fink, and Ted Schilowitz, former studio executive and futurist for Paramount and Fox, and Rony Abovitz, founder of Magic Leap. This week’s guest is Vince Kalubeck, co-founder, Chief Vision Officer, Meow Wolf. We can be found on Spotify, iTunes, and YouTube
