Snap in talks to raise $1B+ for AR glasses, spinning out into independent subsidiary like Waymo
Oct 24, 2025
Key Points
- Snap is raising at least $1 billion for its AR glasses business with Saudi Arabia's sovereign wealth fund as a lead investor.
- The company will spin specs into an independent subsidiary mirroring Waymo's structure under Alphabet, giving the hardware division separate fundraising and operational autonomy.
- The move signals the AR glasses market has matured enough for dedicated hardware leadership as Samsung, Google, and other competitors intensify their efforts.
Summary
Snap is in talks to raise at least $1 billion for its AR glasses business, with Saudi Arabia's sovereign wealth fund among multiple investors. The company plans to spin the specs division into an independent subsidiary structured similarly to Waymo under Alphabet. The move signals confidence in the hardware business while separating it from the core social platform.
The timing aligns with accelerating competition. Samsung just launched the Galaxy XR headset powered by Android XR at Vision Pro parity, and Google is announcing its own XR play today. The AR glasses market is moving from theoretical to genuinely competitive, with major manufacturers finally committing resources.
Snap is replicating Google's Waymo playbook. Google spun Waymo out to give autonomous vehicles focused leadership, separate fundraising ability, and a clearer path to profitability without being buried in the parent company's P&L. Snap appears to be doing the same: isolate the glasses business, let it raise capital independently, and give it the operational autonomy hardware companies need.
Snap CEO Evan Spiegel has been the public face of AR ambitions for years, but the subsidiary structure removes glasses from his direct control and creates room for specialized hardware leadership. The $1 billion raise would fund manufacturing scale and product iteration as competitors intensify.