Mark Zuckerberg-led Meta Platforms Inc. META has reportedly decided to discontinue its custom chip development for its upcoming augmented reality glasses.
What Happened: The in-house chip development was considered too costly and not in line with the company’s current business objectives, reported Fortune, citing two people familiar with the company and changes.
Meta has decided to rely on third-party chipmakers like Qualcomm Inc. QCOM for its forthcoming prototypes and potential future versions of the AR glasses, the report noted, citing one source.
Facebook and Instagram parent did not immediately respond to Benzinga’s request for comments.
The chips were designed to be the heart of the wearable devices they were being developed for, primarily a line of AR glasses codenamed Orion.
An “experimental” prototype of the Orion AR glasses is still expected to be unveiled by Meta later this year.
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Why It Matters: The decision to abandon the project is part of Meta’s ongoing cost-cutting initiatives.
In February this year, Meta reportedly chose not to renew its lease for seven floors of office space in Singapore, following a series of global layoffs.
Meanwhile, in April, Meta launched its next-generation AI chip, the MTIA, to compete with Nvidia Corporation’s AI offerings in the cloud business.
The MTIA chip was designed in-house for Meta’s AI workload, focusing on providing the right balance of compute, memory bandwidth, and memory capacity for serving ranking and recommendation models.
In July, Meta announced second-quarter revenue of $39.07 billion, surpassing analyst expectations of $38.31 billion.
The company also reported adjusted earnings of $5.16 per share for the second quarter, exceeding the analyst estimate of $4.73 per share.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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