Xreal Founder Bets AI Will Push Smart Glasses Beyond Hype

1. Chinese augmented reality (AR) firm Xreal Ltd. founder Xu Chi believes artificial intelligence (AI) may finally provide the compelling use case that smart glasses have long needed, as glasses are a more natural carrier for AI assistants than phones because they can continuously track what a user is looking at [para. 1][para. 2][para. 3]. Xu called glasses “the next major consumer terminal after smartphones” and, before brain-computer interfaces, “humanity’s last screen” [para. 2][para. 3].

2. Xu noted the sector has been “notoriously tricky” since he founded Xreal in 2017, with expected takeoff by 2020 delayed by clunky interaction design, weak content ecosystems, immature hardware, and the absence of a strong platform company [para. 4][para. 5]. Smart glasses are not a single-function device, requiring hardware, software, content and applications to work together—an ecosystem challenge few startups can solve alone [para. 5].

3. Xreal is now counting on a partnership with Google, announced in May, to launch “Project Aura”—lightweight extended-reality (ER) glasses built on Google’s Android XR platform with its Gemini AI assistant, expected globally before year-end, competing with Meta’s Ray-Ban Meta and Oakley Meta AI glasses [para. 6]. Xu said only Google and Apple have the ecosystem appeal to create a new device ecosystem globally [para. 7][para. 8].

4. The smart-glasses market is moving toward early adoption: global shipments reached nearly 14.8 million units in 2025, up 44.2% year-on-year, while China’s market grew faster at 87.1% to 2.46 million units [para. 9]. Chinese vendors accounted for 23.3% of global shipments last year and dominated AR/ER segments with 87.4% share [para. 10]. Yet global penetration remains below 1%; Xu expects 20% by 2030, when urban consumers may feel disadvantaged without an AI assistant worn on their face [para. 11].

5. Hurdles remain: battery life, limited functions, and immature display/interaction technologies still fall short [para. 13]. Over 68% of China’s smart-glasses shipments were sold online in 2025, meaning offline channels—crucial for try-on experiences—are underdeveloped [para. 14]. Most AI functions remain limited to general tasks like Q&A and translation, lacking core value to drive long-term engagement [para. 15]. Venture capitalist Cynthia Zhang predicts 10–20% global penetration by 2030 and eventual replacement of smartphones, with China strong in supply chains and engineering speed and the U.S. stronger in software and foundational model innovation [para. 12][para. 16].

6. Xreal’s business model focuses on hardware sales for now, with subscription revenue possible later if glasses become useful AI assistants [para. 17]. The company filed for an IPO in Hong Kong, targeting listing by year-end, and generated 516 million yuan ($76.3 million) in 2025 revenue, up 30.8% year-on-year, with over 70% from overseas, led by the U.S. [para. 18].

7. Xu said Xreal continues to “globalize and diversify our supply chain, channels and market presence to strengthen business resilience,” monitoring potential U.S. export controls, sanctions, tariffs, and trade policy changes, and not underestimating uncertainty from external policy shifts [para. 19][para. 20].