Welcome back to our weekly roundup of happenings from XR and AI realms. Let’s dive in…
The Lede
OpenAI plans to ship its first hardware device in 2026, a move into physical products following its acquisition of former Apple design chief Jony Ive’s company, io. At an Axios panel at Davos, OpenAI’s Chief Global Affairs Officer said the company is on track to announce the device in the second half of 2026. Multiple reports suggest the initial product could be earbuds codenamed “Sweet Pea” with a unique design and custom 2-nanometer processor capable of handling AI tasks locally rather than relying on the cloud. OpenAI aims to ship tens of millions of units in year one. The strategy would give OpenAI a direct hardware presence to complement its software and nearly a billion weekly users of ChatGPT, but faces tough competition from entrenched products without deep operating-system integration.
Feeling Spatial
Xreal filed a patent infringement lawsuit against rival AR glasses maker Viture, extending an earlier legal clash that began in Germany. A German court had granted Xreal a preliminary injunction related to birdbath optics used in the Viture Pro, temporarily restricting sales of that model, a ruling Viture is appealing while challenging the patent’s validity. Xreal then brought the dispute to the U.S., filing suit in Texas against Viture’s American business. The case unfolds as both companies announce roughly $100 million funding rounds and reposition their products, with Viture gaining traction in gaming-focused display glasses and Xreal aligning with Google’s Android XR, turning a narrow optics dispute into a broader competitive fight.
Editor’s note: We’ll have a deeper-dive standalone article on this topic publishing early next week…
The AI Desk
Three-month-old AI startup Humans& raises a $480 million seed round at a $4.48 billion valuation, one of the largest seed financings on record. Backers include Nvidia, Jeff Bezos, SV Angel, GV, and Laurene Powell Jobs’ Emerson Collective. Senior AI researchers from Anthropic, Google, and xAI, including Andi Peng, Georges Harik, and Noah Goodman, founded the company. Humans& says it is building human-centric AI software focused on collaboration rather than automation, starting with an AI-enhanced messaging platform. The company is researching long-horizon and multi-agent reinforcement learning, memory, and user understanding, reflecting investor appetite for elite teams pursuing foundational AI research paired with product ambitions.
OpenAI annualized revenue surge: OpenAI’s Chief Financial Officer Sarah Friar said the company’s annualized revenue in 2025 exceeded $20 billion, more than triple its 2024 level of around $6 billion, with growth closely tracking a rapid expansion in computing capacity to 1.9 gigawatts. Weekly and daily active user numbers also hit all-time highs, reflecting strong demand across text, image, voice, code, API, and other products. The company recently began testing ads in ChatGPT in the U.S. to help fund ongoing development and infrastructure costs. Friar said OpenAI will focus in 2026 on “practical adoption” of AI in areas such as health, science, and enterprise while maintaining a flexible balance sheet through partnerships rather than owning all infrastructure outright. Axios reporting indicates OpenAI remains on track to unveil its first hardware device in the second half of 2026.
OpenAI outlined a plan to begin testing advertisements inside ChatGPT for Free and ChatGPT Go tiers in the U.S. in the coming weeks as part of a broader effort to expand affordable access to its AI tools while diversifying revenue streams. Ads will be clearly labeled and separate from responses, placed at the bottom of answers when relevant to the conversation, and will not influence ChatGPT’s outputs. OpenAI says it will keep conversations private from advertisers, never sell user data, and give users control over personalization settings. Higher-tier subscriptions like Plus, Pro, Business, and Enterprise will remain ad-free. The move aims to sustain access without forcing paywalls, balancing user trust with revenue needs.
Higgsfield this week rolled out a paired product strategy that combines AI character creation with campaign-based monetization. The new AI Influencer Studio is a Sims-style visual character builder that lets creators design persistent digital personas without prompt writing, with fine control over facial features, bodies, markings, and non-human forms, generating video-ready assets in multiple aspect ratios up to 4K. Alongside it, Higgsfield Earn functions as a managed influencer marketplace. Brands fund campaigns through Higgsfield, creators verify ownership of their Instagram or YouTube accounts, opt into specific campaigns, publish required short-form videos, and are paid based on measured performance, including views, engagement, and completion rates. Higgsfield tracks results, applies campaign payout formulas, and handles distribution and payment. Minimum eligibility includes a public account, three posts, and roughly 1,000 followers. Together, the two products position Higgsfield as both a creator toolmaker and an intermediary that connects AI-generated or human-led influencer content directly to performance-based brand spend.
ElevenLabs launched ElevenLabs Music, expanding beyond synthetic voice into AI-generated music and putting the company into direct competition with Suno and Udio. The platform generates full, commercially usable compositions from text prompts, with tools for editing lyrics, timing, and instrumentation, and supports multi-stem downloads for traditional studio workflows. ElevenLabs introduced the product alongside The Eleven Album, featuring original releases by artists including Liza Minnelli, Art Garfunkel, and Michael Feinstein, who retain ownership and streaming revenue. The company is positioning its approach around opt-in participation, licensing, and rights holder control, betting that professional creators will favor governed AI music systems over open consumer generation.
Dramatic Entrance
TikTok has quietly launched PineDrama, a standalone micro-drama app now available in the U.S. and Brazil that reframes narrative storytelling for vertical mobile consumption. Every video on PineDrama is a one-minute episode in a serialized fictional story, spanning genres like thriller, romance, and family drama, with vertical feeds and personalized recommendations similar to TikTok’s core experience. The app is free and currently ad-free, with “Discover” and “Trending” sections to browse content and features like favorites and viewing history. PineDrama marks TikTok’s bet on bite-sized fiction, positioning the company deeper into the growing micro-drama market, distinct from user-generated short clips.
Spatial Audio
For more spatial commentary & insights, check out the AI/XR Podcast, hosted by the author of this column, Charlie Fink, Ted Schilowitz, former studio executive and futurist for Paramount and Fox, and Rony Abovitz, founder of Magic Leap. This week, our guest is Dean Leitersdorf of Descart AI. You can find it on podcasting platforms Spotify, iTunes, and YouTube.
Charlie Fink is an author and futurist focused on spatial computing. See his books here. Spatial Beats contains insights and inputs from Fink’s collaborators including Paramount Pictures futurist Ted Shilowitz.