Where Is AI/AR Glasses Funding Heading in 2026? Waveguides and Microdisplays Draw Capital Faster

Subtle shifts are emerging in the red-hot financing environment.

By Yuanqiao, VR Tuoluo

AI/AR glasses are one of the hottest consumer hardware funding categories of 2026.

According to incomplete statistics, as of October 2026, the domestic AR/AI glasses industry chain had publicly disclosed more than 37 financing rounds, with a disclosed total of about 9 billion yuan; including undisclosed projects, the figure approaches 10 billion yuan. September was a particularly explosive month for financing, with several deals worth hundreds of millions of yuan announced in quick succession.

Compared with last year, the financing footprint this year can be said to be even larger. Yet amid the heated fundraising environment, we also noticed some subtle shifts.

01

Where Did the Money Go?

In the first half of 2026, AI glasses funding was essentially poured into leading complete-device brands and upstream core component makers, while midstream module suppliers were skipped. Related reading: "9 Billion Yuan Flows In, Capital Bets Big on AI Glasses and 'Shovel Sellers' | 2026 Midyear Special".

Among the top five projects by full-year funding size, upstream players showed exceptional fundraising power. SeeYA Technology raised 2.015 billion yuan in its IPO, and Lante Optics completed a 1.055 billion yuan private placement. Even excluding secondary-market financing such as IPOs and listed-company placements, the year's largest pure primary-market equity round was secured in the second half by waveguide company Kunyou Photonics.

Since July, the funding direction in the second half has become more clearly "upstream dominance," with three of the four largest individual deals going to waveguides and microdisplays. Specifically, over the past three months, the waveguide and MicroLED microdisplay segments of the AI glasses supply chain saw the highest funding density and the largest amounts, taking the lion's share of investment. The most telling figures are "Kunyou Photonics C+ round exceeding 1 billion yuan" and "Weijiu Photonics MicroLED Pre-A round of several hundred million yuan."

Funding Events in the Past Three Months

It is not hard to see that market funding sentiment has shifted over the past three months. Investors' logic is moving away from buying into "complete-device concept narratives" toward placing greater value on "verifiable mass-production capability and scarce upstream capacity." In other words, investors now care more about a company's "delivery capability" than paper specs or story-driven visions, as illustrated by Weijiu Photonics being singled out by investors for "already possessing initial mass-production and delivery capability," and Kunyou Photonics directly investing 2 billion yuan to build a 12-inch wafer production line.

In addition, some companies in the waveguide field have achieved annual deliveries at the level of millions of units; the microdisplay track has also made notable progress, with MicroLED continuing to advance toward full-color implementation and silicon-based OLED yields achieving successive breakthroughs. SeeYA Technology raised CNY 2.015 billion in its STAR Market IPO, also providing upstream companies with a clear valuation benchmark.

On the other hand, in the hardware cost structure of AI glasses, optical display components account for about 40%-50%, while the main control chip accounts for 20%-30%. Take Ray-Ban Meta as an example: the Qualcomm SoC it uses has a single-component material cost of about USD 58.9, representing 35.9% of the total material cost of the device. It therefore makes sense for investment to move upstream.

In addition to the changes in investment logic mentioned earlier, AI/AR glasses financing in 2026 also saw the following shifts:

First, individual funding rounds are larger. Nearly all 2026 rounds reached the 100 million level, including RayNeo's 1 billion yuan C+ round, Yiwen Technology's $150 million Pre-B round, INMO's nearly 1 billion yuan C3 round, and Kunyou Optoelectronics' C+ round of more than 1 billion yuan. The clearest indicator is that INMO raised a total of 500 million yuan across three rounds in 2025, while a single round in 2026 jumped straight to the 1 billion level.

Second, the investor mix has shifted: traditional financial VCs are retreating, while state-owned and industrial capital is moving in faster. All three major funding rounds in September were backed by state-owned or industrial investors. Behind INMO Technology's nearly 1 billion yuan C3 round was Sichuan Zhenxing Sci-Tech Fund, a sub-fund under the Sichuan Social Security Sci-Tech Fund; behind LLVision's C+ round of more than 300 million yuan were three major state-owned platforms in Beijing; and behind Raysolve Semiconductor's nearly 100 million yuan Pre-A4 round was China Merchants International.

Third, capital-market activity is intensifying and momentum continues to build. 2026 can be called the IPO year for AI/AR glasses, with a steady stream of capital-market moves that were entirely absent in 2025. Examples include XREAL filing with the Hong Kong Stock Exchange in April 2026, Rokid obtaining overseas listing registration in February 2026, RayNeo publicly recruiting for a director of investor relations, and INMO Technology formally launching its listing preparations.

02

The Multiple Reasons Behind the Shift

The shift in AI/AR glasses investment logic in 2026 shows that this sector is moving from the concept stage into commercialization validation, driven by several deep underlying factors. The picture can be viewed from three angles:

The Battle for Position: A Classic Seat-Grabbing Play by Platform Capital

It is beyond dispute that global smartphone market growth has peaked. IDC data shows that worldwide smartphone shipments reached a historic high of about 1.37 billion units in 2019, and have since fluctuated in the 1212.6 hundred million unit range. Full-year 2025 shipments totaled 1.26 billion units, up just 1.9% year on year. The industry has left the high-growth era behind and entered a battle for market share in a saturated market.

Handset makers and tech giants need to open up a second growth curve, which further intensifies the battle among platform players for position in the AI glasses arena. A look at the funding list of the past three months shows that Meituan, Tencent, and Alibaba have all made moves: Yiwen Technology's $150 million Pre-B round was led by Meituan Dragonball and Meituan Strategic Investment, with Tencent following on in Yiwen and adding to its Rokid stake multiple times, while Alibaba's Qianwen launched AI glasses and backed Rokid.

For Meituan, the core motivation for entering the AI glasses market is not simply confidence in the short-term returns of a single product. It stems from a deeper concern: that Meta, Apple, or Tencent could seize control of the next-generation device gateway first. If Meituan sits out now, it risks becoming a service provider dependent on someone else's gateway a few years from now, limited to delivery, local services, and payment support. That would be a true case of "dimensional reduction strike."

This is why platform capital such as Meituan and Tencent follows an investment logic of being present regardless of the outcome: individual deals are sizable, but equity stakes are low, and bets are spread across multiple companies. This is the classic "seat-saving" playbook of platform capital.

Financial returns are secondary; state capital and industrial capital are mainly seeking investment attraction

As noted earlier, state capital and industrial capital are both moving into AI glasses investments at an accelerating pace. Yet for both local state-backed investors and platform industrial capital, the primary goal is not direct investment returns, but strategic control at the level of industrial clusters, supply chains, and ecosystems.

Core components behind smart glasses, including optical waveguides, silicon-based OLED, and MicroLED microdisplays, all fall within national-level hard-tech categories, making them future hardware sectors that local governments prioritize for support. When a local government focuses its investment on a single brand, the resulting multiplier effect across the supply chain can often bring an entire industry chain onshore.

Once a leading terminal maker sets up operations, its suppliers of optics, microdisplays, structural parts, and other supporting components tend to cluster nearby, creating a chain effect of "attract one anchor, bring in a cohort of suppliers." This rapidly builds a local hardware industry cluster and is the core logic behind the chain-chief system used by local governments for investment attraction.

This is why local governments often invest as a group in a single company. Behind INMO Technology's nearly 1 billion yuan C3 round, for example, were seven local state-owned investors: Sichuan Revitalization, Jing'an Capital, Shibei Hi-Tech, Guangzhou Industrial Investment, Dongpo Guotou, Sichuan Zhongshi, and Meishan Zhongshi. Such a structure is rare in traditional financial VC deals.

Capitalization Drives 2026 AI Glasses Funding Frenzy

The industry has defined 2026 as the first year of IPO preparation for the AI glasses sector, with capitalization clearly accelerating across the board. XREAL was the first to file a prospectus with the Hong Kong Stock Exchange, leading players such as INMO Technology and RayNeo simultaneously began IPO preparations, and Rokid completed its conversion to a joint-stock company.

Judging by the performance of leading companies, the high valuations assigned in the primary market are no longer purely speculative bets, but "pre-IPO pricing" anchored by an IPO exit. The core reason financial VCs dared to assign higher valuations in 2026 is that the IPO timelines of leading companies have become plainly visible.

03

Conclusion

The heated AI/AR glasses arena in 2026 is a picture jointly sketched by multiple forces.

Platform capital moved in early to secure a seat at the table, local state-owned capital used flagship projects to drive industrial cluster development, and financial VCs bet on the IPO exit window. The resonance of these three forces has kept financing momentum rising, but beneath the surface of the funding boom, the industry is also being pushed to a crossroads of commercialization validation.

Capital enthusiasm often fails to align with real consumer demand. Compared with the red-hot primary market, end-market sales are clearly under pressure, and consumer interest in AI/AR glasses looks more like novelty-seeking. Data show that in July 2026, monitored smart glasses sales across the three major platforms totaled just 74,000 units, with sales revenue down 43% month over month, while return rates remain stubbornly high.

Meanwhile, the AI glasses sector index in the secondary market is also retreating, and whether the capacity added upstream can be genuinely absorbed may still lack a clear answer. The 2026 AI glasses race has entered its second half, and the next word will ultimately pass from capital back to products and users.

       Original title : "Where Did the Money Go? Changes in 2026 AI/AR Glasses Financing"