WIRED: Magic Leap Stands Out Among Giants in the Artificial Reality Race

Artificial reality is making waves throughout the tech industry, and Magic Leap has made one of the biggest splashes in terms of financing. The company has secured what may be the largest C-round in history: $793.5 million.

Fort Lauderdale, FL-based Magic Leap will need to spend wisely to compete with the tech giants of the west coast and Asia.

A Crowded Field

A recent profile of Magic Leap in Wired noted that “Facebook, Google, Apple, Amazon, Microsoft, Sony, Samsung—have whole groups dedicated to artificial reality, and they’re hiring more engineers daily. Facebook alone has over 400 people working on VR.”

It helps to separate the two ideas being lumped together here. Virtual reality closes off the room around you and puts you somewhere else. Augmented reality, which is what Magic Leap is working on, lays digital images over the real world you can still see. Augmented reality is the harder engineering problem, because the images have to sit convincingly in a real room, in real light, from a device light enough to wear.

By 2020, the augmented and virtual reality markets are expected to be worth about $150 billion. This is creating hardware and software development opportunities for startups in just about every industry and facet of life, from film to education to day-to-day office administration.

Where Virtual Meets Connected

But the potential applications could spill over and combine with other emerging technologies. As we enter virtual worlds, the demand for IoT devices and smart-connected spaces could increase. The combination of virtual space and IoT tools has the potential to revolutionize industries such as skilled trades, healthcare, and tourism.

As startups plan for the future, it is worth considering if virtual reality will disrupt their business and how technologies like Magic Leap might impact them. Until Magic Leap unveils what it’s hiding, the true extent of its impact can’t be measured, but until then, it doesn’t hurt to imagine.

What Magic Leap Unveiled

The wait lasted two more years. In August 2018, the Magic Leap One headset finally went on sale for $2,295, with telecom giant AT&T on board as an investor and exclusive retail partner. It ran on the company’s own operating system, LuminOS, and came with tools for developers. By then the investor list also included Google, Alibaba, Andreessen Horowitz and Qualcomm Ventures.

The product didn’t live up to years of hype, and 2020 brought a crisis. According to TechCrunch, the company was struggling with a cash crunch, laid off most of its staff in April 2020, and then found new funding at the price of founder Rony Abovitz stepping down as CEO. Peggy Johnson, a former Microsoft executive vice president of business development, took over, and the company shifted its focus from consumers to businesses.

That pivot produced the Magic Leap 2, a headset aimed at enterprise customers. In October 2023, Magic Leap named Ross Rosenberg as CEO, presenting the change as the completion of its enterprise pivot.

From Headsets to Helping Others Build Glasses

The latest chapter looks quite different from the 2016 vision. In May 2024, Magic Leap announced a strategic technology partnership with Google, combining its optics and manufacturing expertise with Google’s platforms. In October 2025, it extended that partnership and said it was establishing itself as an “AR ecosystem partner” to help other companies build augmented reality glasses, drawing on its experience in optics, waveguides, prototyping and design for manufacturing.

“Magic Leap’s evolution, from pioneering AR to becoming an ecosystem partner, represents the next phase of our vision,” Rosenberg said in that announcement. Google’s Shahram Izadi said Magic Leap’s expertise had been essential to advancing Google’s Android XR glasses concepts.

In other words, the company that once looked set to take on the giants is now working alongside one of them. The tech Wired’s 2016 profile hinted at, light, wearable displays that blend digital images into the real world, still matters. It’s just reaching the market through partners rather than through a Magic Leap headset of its own.

What It Means for Startups

Magic Leap’s story is a reminder that money buys time, not certainty. Even a record round can run out when a product is harder to build, and harder to sell, than anyone expected. The giants Wired listed in 2016 could afford to keep spending through a slow market; a startup has to find a business that pays along the way.

It also shows that deep technical work keeps its value even when the original product plan doesn’t work out. Magic Leap’s optics expertise outlasted its consumer ambitions, and that’s what has kept it relevant. For founders in hard-tech fields, building something others need can be as valuable as building the finished device yourself.