Saudi Arabia acquires majority stake in Magic Leap
Saudi Arabia increases its investment in Magic Leap. $450 million is flowing into the company.
According to a report by The Telegraph, Saudi Arabia is investing $450 million in Magic Leap through its sovereign wealth fund PIF. The state already invested $400 million in Magic Leap through its sovereign wealth fund in March 2018.
Saudi Arabia is said to own more than 50 percent of Magic Leap after the new investment. This is expected to give the state control over the once-hyped AR company. Saudi Arabia is said to be able to appoint four out of eight board members. Magic Leap has not yet commented on the investment.
The sovereign wealth fund's investment in Magic Leap could be part of a larger Metaverse strategy unveiled by Dubai Municipality this summer.
Magic Leap evolved from revolutionary smartphone killer to B2B niche product
Magic Leap founder and tech visionary Rony Abovitz once wanted the company to become the Apple for AR headsets and replace the smartphone. He won over investors like Google and Alibaba, who poured billions into the company.
However, technical advances didn't come fast enough and Magic Leap ran into financial trouble during the corona pandemic at the latest. Abovitz left the company along with about half of the staff, and former Microsoft executive Peggy Johnson took the helm.
She strengthened the B2B focus and launched the Magic Leap 2, which already existed as a prototype, in September 2022 for $3,300. Like Microsoft's Hololens, the device is aimed at companies and professional users.
Magic Leap 2 was rated well in reviews and is said to be superior to its predecessor and Hololens in many areas. Johnson does not rule out a return to the B2C market, but no timetable is known.
Magic Leap founder continues to believe in his AR vision
Abovitz repeatedly emphasized after his departure from Magic Leap that only the third iteration of the AR headset was intended for the mass market. He continues to believe the phase he christened "Apollo" is achievable. He envisions open-built AR headsets that have a design optimized for the intended use (sports, entertainment, navigation, etc.).
Other manufacturers such as Meta, and possibly Apple and Alphabet, are also pursuing this goal, which is not yet technically achievable. They are currently taking the detour via VR headsets with integrated AR video streaming and will probably do so in the foreseeable future. One example of such a device is Meta's recently released Quest Pro. HTC also wants to launch a new XR headset in 2023.