Saudi Arabia backs Magic Leap in quest to rival Apple and Meta in virtual reality

Saudi Arabia has intensified its ambitions in the technology sector by investing more than $1bn (£744m) into Magic Leap, a Florida-based firm developing mixed reality headsets designed to compete with Apple’s Vision Pro and Meta’s Quest. The kingdom’s Public Investment Fund (PIF) has been a consistent backer, injecting a further $205m into Magic Leap in recent months as it seeks to steer the company through a challenging commercial landscape.

Founded in 2010 by Rony Abovitz, Magic Leap once captured the public’s imagination with early demonstrations of its augmented reality goggles, promising to seamlessly blend digital images with the physical world. Yet the company’s 2018 product launch proved underwhelming, resulting in the loss of more than 80 percent of its workforce and a restructuring towards business-focused augmented reality solutions.

Magic Leap has endured persistent losses, raising over $4bn in debt and equity but never turning a profit. Its future now depends heavily on Saudi Arabia’s sovereign wealth, with PIF’s serial investments keeping the business operational. The firm’s UK subsidiary recently disclosed plans for ongoing funding, forecasting further support from an existing investor next month and additional capital in 2026, extending its liquidity through the foreseeable future.

The substantial investment is part of a broader strategy orchestrated under Crown Prince Mohammed bin Salman’s Vision 2030 programme, which aims to diversify Saudi Arabia’s economy away from oil dependence. The PIF, now valued at roughly $1tn, has massively increased its exposure to gaming, entertainment, and advanced technology. Recent highlights include a $55bn deal to acquire games-maker Electronic Arts and hosting the Esports World Cup for global gamers. In the realm of football, the fund has poured billions into domestic clubs, drawing high-profile players to the Saudi Pro League.

Amidst this forward march, not all of the kingdom’s futuristic ventures have gone smoothly. Projects such as the Neom metropolis and The Line, billed as models for future cities, have faced delays and budget overruns. Still, momentum in technology investment remains robust, typified by Magic Leap’s survival despite its chequered history.

Magic Leap continues to secure strategic partnerships, most notably with Google — which led one of its early investment rounds — agreeing last year to work together on immersive technologies. Google has taken further steps in the sector with its latest Android release for mixed reality headsets and the UK-based DeepMind division’s Project Astra, focused on AI-powered glasses. Meanwhile, Meta and Apple maintain their push into augmented reality devices, though these remain niche products compared to the global smartphone market.

Magic Leap and the PIF have so far declined to comment on their plans, but the ongoing investments signal sustained determination to make the kingdom a key player in the next generation of immersive digital experiences.