The metaverse, four years later: Is it finished or just at a standstill?

Mark Zuckerberg no longer says much about the metaverse. He barely mentions it in interviews, public appearances, or shareholder meetings. This is striking because in October 2021, he presented this new “technology of technologies” as the future of his company, which he even rebranded as Meta during a period of serious reputational crisis. The metaverse was meant to take the internet to the next stage: move beyond two dimensions to immerse ourselves in a fully virtual world, to step inside the internet itself. The tech mogul promised that this new world would generate “hundreds of billions of dollars” by 2031. Some analysts even speculated that the metaverse business would reach around $800 billion as early as 2024.

It now seems clear that those figures were a fantasy. Bloomberg reported last week that the company plans to cut its budget for this venture by 30% next year. The reduction would affect Reality Labs, the division dedicated to long-term projects such as augmented reality glasses (which overlay digital elements onto the real world) and virtual reality headsets. In an end-of-year summary on his blog, Andrew Bosworth, head of Reality Labs and one of the people with the most influence over Zuckerberg, mentions the word “metaverse” only in the last paragraph.

Does this mean the metaverse is dead? Should the large budget cut be interpreted as a sign that the project has succumbed to the fierce race to lead in artificial intelligence AI? Some see it that way. Meta itself does not. “We are moving some of our metaverse investment toward AI glasses and wearables, given their current success. We do not plan major changes beyond that,” Meta sources told EL PAÍS.

Analysts consulted by this newspaper also frame the budget cut as part of the natural development process for this new technology. “It’s a strategic reorientation that’s quite consistent with the current phase of capitalist competition in the digital economy,” says Ekaitz Cancela, co-director of Spain’s Center for the Advancement of Infrastructural Imagination (CAII) and author of Utopías digitales (Digital Utopias). “We’re facing a classic process of capital restructuring in response to competitive pressure: Meta can’t afford to be developing long-term technology while OpenAI, Anthropic, Google, and even Musk’s xAI are vying for dominance in the AI market. Whoever dominates it faster will make the most money selling their services.”

Indeed, Zuckerberg’s statements have recently shifted squarely toward AI: he often highlights the chatbot models under development and the smart Ray-Ban glasses, which, unlike virtual reality headsets, are performing well. At the company’s major annual event in September, Zuckerberg claimed that virtual reality, augmented reality, and AI are the three technologies that will make up the metaverse. And that progress is being made on all three.

“This shouldn’t be seen as a zero-sum game,” explains Víctor Javier Pérez, marketing director at Invelon and an expert on immersive industries. “The new Meta Ray-Ban Display glasses, which incorporate a small monocular screen and a neural wristband to interpret hand gestures, require spatial analysis, just like VR headsets.”

For Pérez, the success of the Ray-Ban AI-powered glasses has led Zuckerberg to consider approaching the metaverse “in reverse: rather than betting everything on VR headsets, which involve total immersion and are less intuitive, it may make sense to capitalize on the interactive glasses boom and gradually add more features.” The neural wristband, which allows users to navigate the tiny display on the glasses with hand movements overlaid on reality, is a good example.

AI is, in fact, one of the key technologies for developing the spatial recognition that makes the metaverse possible. Generative AI — the kind behind chatbots like ChatGPT, Gemini, or Claude — is also contributing to the creation of virtual worlds. Meta has even launched a prompt-based world generator to help developers build environments on Horizon Worlds, the company’s virtual platform.

Reorienting the business

Meta isn’t the only company investing in smart glasses. Google and HTC are developing their own models, and the market seems to see potential. “Over the past decade, we’ve been exploring the frontier of computing, trying to anticipate what comes after computers and smartphones… The platform we were looking for is AI-enabled glasses,” Bosworth writes in his end-of-year summary.

“For the last decade we’ve been exploring the frontier of computing trying to figure out what comes after smartphones and laptops [...] The platform we’ve been chasing for more than a decade is finally starting to come into focus. This shift is happening most clearly on AI glasses,” Bosworth writes in his aforementioned year-end summary.

When Zuckerberg unveiled his ambitious metaverse project to the world, he also said it would take years, perhaps decades, to complete. “The crucial decade will be the 2030s. By then, we’ll have enough technological advancements and all the necessary elements to build the next generation of devices that allow you to be hyperconnected,” says Roberto Romero, an immersive media specialist and consultant. “People will begin to realize that we won’t need cell phones anymore because there will be a device that understands everything around you.”

Nevertheless, progress is being made toward that virtual world. In November, for example, Meta presented Hyperscape Capture, an application that can create a virtual twin of any physical environment, allowing users to share, for example, their living room with other contacts who, using virtual reality headsets, can feel as if they are really there.

Romero thinks it presumptuous for Meta to say it’s building its metaverse. “It would be like saying someone is building their internet: it’s the environment in which we’ll operate,” he argues. He also tempers expectations set by films like Ready Player One or novels like Snow Crash about what can truly be considered the metaverse. “It’s never going to be a massive virtual reality market, where everyone is there all day. That vision isn’t accurate and doesn’t make much sense.”

Nervousness among shareholders

Zuckerberg has asked Meta’s metaverse division to make broad budget cuts of 30%, “given that Meta has not seen the level of industry-wide competition over the technology that it once expected,” company sources told Bloomberg. According to the same source, the metaverse project has faced intense scrutiny from shareholders, who view it as a drain on resources, and from activists, who believe that the virtual worlds designed by Meta compromise children’s privacy and safety.

Reality Labs, the company behind Meta’s metaverse project, has lost more than $70 billion since the beginning of 2021, according to Bloomberg figures. The announcement of the 2026 budget cut in this segment, accompanied by the approval of a dividend, sent Meta’s shares up more than 7%, after they had fallen 15% since late October and 20% from their annual high in August.

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