China: Alibaba stake in AR glasses maker part of tech firm’s race to dominate metaverse

Alibaba Group Holding Ltd. is leading a $60 million investment round in Chinese augmented reality (AR) glasses maker Nreal, as major internet companies continue to elbow their way into the metaverse realm.

Beijing-based Nreal said it will use the latest financing to increase investment in R&D and accelerate the company’s global business expansion to new markets this year, including at home in China. The company is currently active in overseas markets such as Japan and the United States.

The company will also use the funds to expand existing partnerships “to deliver a wider range of content and experience” to users.

Alibaba declined to comment on the development. Existing strategic investors of Nreal include Chinese electric vehicle start-up Nio, video streaming platform iQiyi and short video app Kuaishou.

The start-up is among the few companies in the early wave of AR glasses makers. Last year, it unveiled its second-generation Nreal Air glasses with major improvements.

AR technology imposes digital images over the real world. Users can wear Nreal’s glasses to access AR applications such as games or movies.

AR forms a key component of the metaverse — a trending concept which loosely refers to a world of endless, interconnected virtual communities where people can meet, work and play, using such technologies as virtual reality headsets and AR glasses.

Alibaba has invested heavily in the AR industry by pouring roughly $1 billion into startups such as Magic Leap based on extended reality, known as XR. It is also innovating through its Damo Academy XR lab to develop XR e-commerce products and other ideas for use in the metaverse.

Its popular workplace app DingTalk, for instance, is eyeing the launch of its proprietary AR glasses, which can be used to hold meetings in the metaverse, according to a company executive.

The company, which tallied over 500 million users last year, said it is looking to boost its metaverse footprint with the new launch, which includes self-adjusting optics and support for nearsighted users, said Ye Jun, president of DingTalk, an arm of internet giant Alibaba Group.

Ye said that a prototype version of the goggles, priced at 13,999 yuan ($2,202) on e-commerce site Taobao, was introduced in 2020 in collaboration with Nreal.

“Back then, people had a hard time comprehending what it was all about.”

China’s other major tech firms are racing to file metaverse-related patents and trademarks in a bid to outpace the intensifying competition to build what many expect will be the next version of the web.

Technology powerhouse Huawei said in November that it will launch a gaming headset incorporating six degrees of freedom, complete with controllers and six DoF modules. Six DoF refers to the freedom of movement of a body in three dimensions. Smartphone maker Xiaomi revealed its stand-alone AR smart glasses in September.

Gaming and social media giant Tencent filed 4,085 VR and AR patent applications in 2020 and 2021, the second-highest number in the world, slightly trailing Samsung Electronics’ 4,094 applications, according to a study cited by Fortune magazine.

In December, search engine and autonomous carmaker Baidu also unveiled its homegrown metaverse app, a move that aims to give it a head start in the “next big thing” in technology.

Baidu launched its Xirang app during an annual developers’ conference. It enables up to 100,000 online participants and 100 global speakers to participate in virtual meetings simultaneously.