Meta In Talks With Magic Leap for AR IP Deal

According to reports in the Financial Times, Meta has begun talks with Magic Leap in the hopes of creating a multiyear deal. The deal’s focus could centre around intellectual property licensing and manufacturing of Magic Leap AR headsets in the United States.  

It’s believed that Magic Leap’s intellectual property surrounding custom components like its waveguides and optics is very valuable. 

At a time when Meta appears to be doing an about-turn on its metaverse plans after ploughing billions of dollars into projects that are yet to yield results, where does this new deal sit in terms of the company’s current goals?

If the deal goes through, it could help ease Meta’s reliance on Chinese-manufactured components. Let’s take a look at what’s been revealed so far about this potential agreement.. 

Who Is Magic Leap?

Founded in 2010, Magic Leap is a Florida based AR company. During the company’s initial quest for funding, it raised in excess of $3.5 billion through multiple rounds, attracting support from Qualcomm, Alibaba, and Google. 

The company was founded by Rony Abovitz, an American entrepreneur who had previously owned a company producing surgical robot arms. The company also employs Richard Taylor of New Zealand movie special effects company, Weta. Previously, the role of Chief Futurist was held by author Neal Stephenson, who coined the term “metaverse” in his 1992 novel, Snow Crash.

In 2018, the company released its first first headset, the Magic Leap 1. Sales were very low, and only a few thousand units were sold. Following the underwhelming entry into the market, Magic Leap turned its attention toward away from consumer products, instead creating enterprise applications. 

Since 2019, Magic Leap has worked with a contract manufacturer called Jabil in Mexico, giving the company the capacity to produce tens of thousands of headsets each year. 

Two years later, Magic Leap started exploring a sale. After a possible deal with Facebook didn’t come through, a longterm Saudi investment fund acquired a 50% controlling stake in the company. 

September 2022 saw the launch of the Magic Leap 2, a device that shares functionality with Microsoft’s HoloLens. Following this release, the company gained considerable interest after chief executive Peggy Johnson talked about the idea of licensing Magic Leap’s IP and patented optics manufacturing processes to other companies creating XR technology. 

What Will the Deal Bring?

So far, neither company has commented on the potential partnership.The deal will not, however, lead to the launch of a Meta-Magic Leap headset. 

When talking to the Financial Times, Magic Leap discussed the complexities associated with developing AR tech, and the challenges companies face with overseas manufacturing partners when developing AR optics.

According to Magic Leap, the company has already entered several non-exclusive IP licensing and manufacturing partnerships. 

Where Is Meta’s Metaverse?

All of this news comes following an intense period at Meta. Over the past few months, the company has been forced to make unprecedented redundancies, particularly from departments developing VR and metaeverse technologies. 

In addition to this, the company had received a record $1.3 billion fine from EU regulators over a breach of privacy laws by transferring European user data to the United States. 

Against this backdrop, Mark Zuckerberg recently appeared to have turned his attention away from the metaverse, instead discussing the company’s focus on developing AI. For many, this has sounded like the death knell for the comany’s metaverse dream.

That said, the talks with Magic Leap along with Meta’s plans for a potential Quest 3 Lite launch next year demonstrate that the company is still committed to developing mixed reality. 

Since 2020, Meta has been carrying out real-world testing of Project Aria; a platform designed to train AR perception systems. 

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