Meta has abandoned efforts to make custom chips for its upcoming AR glasses

An ambitious move within Meta to build its own custom chips for use in an expanding line of wearable consumer devices fell victim to ongoing efforts to rein in company costs.

Back in 2023, while Meta was still deep into cofounder and CEO Mark Zuckerberg’s “year of efficiency,” years of work on the in-house development of computer chips crucial to a planned line of wearable glasses effectively came to an end. Amid mass layoffs and cost-cutting efforts throughout the company, work on custom chips was deemed too expensive, and the need for the chips too far removed from current business priorities, two people familiar with the company and the changes told Fortune .

Instead of designing its own chips for smart glasses, Meta has shifted gears and opted to rely on third-party chipmakers like Qualcomm for its upcoming prototypes and potential future versions of the augmented reality (AR) glasses, one of the sources said.

While Meta continues to design other types of chips, such as specialized processors to run AI workloads in its data centers, the company’s pullback from custom chips for wearables marks the end of an ambitious project that began in 2019. The chips were set to be the backbone of the wearable gadgets they were being developed for, mainly a line of AR glasses code-named Orion. An “experimental” prototype of the Orion AR glasses is still set to be revealed by Meta sometime this year, likely in the coming weeks and possibly in September at Meta’s Connect event for developers, one of the people said.

Meta declined to comment.

Silicon to power Zuckerberg’s vision

Smart glasses and virtual reality headsets are at the center of Zuckerberg’s vision for the future of computing. The CEO recently predicted that AR and AI-enabled glasses will be used by hundreds of millions of people in the near future.

While Meta generates the overwhelming majority of its revenue from advertising on its various social media platforms, including Facebook and Instagram, the company has spent tens of billions of dollars building a consumer hardware business. The group, known as Reality Labs, generated a relatively scant $353 million in revenue and an operating loss of $4.5 billion in the most recently ended quarter.

Meta currently sells a line of Ray-Ban smart glasses through a partnership with eyewear giant EssilorLuxottica . The current version incorporates a camera and a chip that connects to a person’s phone, but does not include AR capabilities, which would overlay digital information directly on the lens.

When the Orion project was in its early stages, custom chips were thought necessary to get the kind of performance Zuckerberg ultimately sought. The custom chips were intended as well for a next-gen version of the AR glasses being developed under the project name Apollo, the source familiar with the plan noted. Meta at one point also considered using a custom chip for its popular Quest virtual reality headset, but that idea was killed early on, as was a custom chip for a planned smartwatch that was nixed in its entirety .

The design work on the chips for wearables was done by the silicon team within Meta’s hardware division. The team was actually developing three separate chips for AR glasses: one for the “puck,” a non-wearable processor portion of the glasses; one within the glasses, mainly needed for image recognition; and another processor within the glasses, the sources told Fortune . The individual project names for the chips were Armstrong, Avogadro, and Acropolis, respectively, one of the people familiar with the plan said. There were plans to develop a line of smaller chips, like power management integrated circuits, or PMICs, that have also been abandoned, the person added.

While it’s possible that some of the custom work done over the previous years will be useful for future wearables projects, or lead to Meta using semi-custom chips, the company for now has switched to relying on “off the shelf” XR chips from Qualcomm , one of the sources said. Qualcomm also provides the VR chips used in Meta’s Quest headsets.

As for the minds behind this work, scores of Meta employees from the silicon team have been laid off since October. Cuts to the team were first reported by Reuters. One of the sources noted that, once layoffs are completed this year, the silicon team is likely to be whittled down to only a “few key people” needed to communicate with vendors. Work on a custom chip for Meta’s growing generative-AI needs has also been troubled , according to reporting by Reuters.

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This story was originally featured on Fortune.com