Sprint to become the "World's First Smart Glasses Stock" - Former NVIDIA Engineer Goes to Hong Kong to "Refill"

Ask AI · How former NVIDIA engineer Xu Chi shapes XREAL’s technological DNA?

21st Century Business Herald Reporter Wu Jianan

Recently, former NVIDIA engineer Xu Chi led his AR glasses leader XREAL to officially list on the Hong Kong Stock Exchange, aiming to become the “world’s first smart glasses stock.”

According to the prospectus, XREAL’s revenue last year reached 5.74B yuan, and it has established partnerships with global giants such as Google, Bose, and Sony.

The company’s overseas revenue has increased year by year, with a sales network covering 40 countries and regions. Top capital firms like Alibaba, Kuaishou, and Sequoia Capital under Lei Jun have entered the market, pushing its valuation to as high as $833 million.

However, behind this luxurious capital lineup, the company’s financial difficulties cannot be hidden. According to the prospectus, from 2023 to 2025, although XREAL’s revenue has increased annually, losses continue, with only 63.36 million yuan in cash remaining at the end of 2025, and cash flow bleeding continuously.

Meanwhile, industry competition has become fierce. Meta has initially taken the lead in the global smart glasses market through its cooperation with Ray-Ban, while Apple and Google are watching closely. Domestically, emerging competitors like Raytheon Innovation and Rokid are rapidly capturing market share through differentiated strategies.

Under the test of capital patience and business reality, can Xu Chi lead XREAL out of the loss quagmire, successfully go public amid giants, and achieve self-sustaining growth? This not only concerns the fate of a startup but also when the entire smart glasses track can truly reach its “iPhone moment.”

XREAL’s story begins with its founder Xu Chi’s career choices.

Xu Chi graduated with a bachelor’s degree in electronic information engineering from Zhejiang University and studied in the mixed class of Zhu Kezhen College, known as the “Talented Class” of Zhejiang University. After earning a Ph.D. in electronic engineering from the University of Minnesota Twin Cities, he worked successively at the global graphics technology giant NVIDIA and at Magic Leap, then an AR star company.

In 2016, Xu Chi decided to return to China to start a business, focusing on AR glasses development. He recruited Zhejiang University classmates Xiao Bing and Wu Kejian, who are now the company’s Chief Optical Scientist and Chief Algorithm Scientist, respectively. In 2017, he officially founded Shenzhen Tuaruo, with its headquarters set in Shanghai by 2025.

This pure “Zhejiang University system” tech team of post-80s, forms the core entrepreneurial backbone of XREAL. They firmly believe that AR glasses will be the next-generation personal computing center after smartphones.

After nearly a decade of development, the company has also become a leading player in this field. According to iResearch data, based on sales revenue, XREAL has ranked first in the global AR glasses market from 2022 to 2025; by 2025, in the entire smart glasses market including AR glasses and non-display glasses, XREAL ranks second globally and first in China.

XREAL’s revenue comes from AR glasses sales, accessory sales, and technical services, with over 90% of its income from AR glasses sales. In 2025, the company’s total operating revenue was 516 million yuan, with AR glasses sales accounting for 403 million yuan.

Regarding AR glasses, XREAL has different product lines, including the entry-level Air series, the high-end One series, and the flagship Light-Ultra-Aura product line.

The Air series is entry-level, with a larger user base, focusing on immersive viewing, gaming, and mobile office scenarios. The One series further enhances display and interaction capabilities, equipped with Micro-OLED display technology and a customized X1 side-processing chip.

According to the prospectus, the One and Air series contributed 95% of sales over the past three years. The 21st Century Business Herald reporter noted on e-commerce platforms that the One series is currently the only glasses series sold at XREAL’s JD and Tmall flagship stores, with post-subsidy prices ranging from 2,960 to 3,970 yuan, significantly higher than the previous Air series priced in the two-thousands.

Shifting product lines from entry-level to high-end has directly boosted XREAL’s gross profit margin. The prospectus shows that XREAL’s gross profit margins from 2022 to 2025 were 18.8%, 22.1%, and 35.2%. Additionally, the accessory gross profit margin for the One series increased from 22.6% in 2024 to 47.3% in 2025.

The gradual upgrade of product lines and the resulting brand premium may indicate an expanding market demand for higher-end smart glasses. By 2025, 71% of XREAL’s overseas revenue came from markets such as the US, Japan, and Europe, with Google being its second-largest customer in 2025. Both are deeply developing Project Aura based on the Android XR platform.

“The company collaborates with leading global technology companies in chip architecture, optical engines, spatial perception algorithms, and operating systems. Google has injected its operating system, the world’s most extensive mobile developer ecosystem, and Gemini multimodal AI model capabilities into the company.” XREAL stated that Project Aura glasses are expected to evolve into AI-enabled products capable of understanding user needs, engaging in natural conversations, and proactively completing tasks.

All along, XREAL has been favored by capital, with numerous star investments supporting its financing journey.

Among its major shareholders are Alibaba’s Taobao China Holdings with 6.68%, Kuaishou’s Cosmic Blue with 6.66%, Lei Jun’s Sequoia Capital with 4.33%, Luxshare Precision with 1.18%, and three major state-owned funds—China Internet Investment Fund, Wuxi New Dynamics, and Pudong Chuangling—with holdings of 2.46%, 1.11%, respectively.

Since its founding, XREAL has completed dozens of funding rounds, with investors including Alibaba, Kuaishou, NIO Capital, Hillhouse, Sequoia Capital, iQiyi, and others. After its Series D financing in 2024, XREAL’s latest valuation reached $833 million, approximately 204M yuan.

Despite the industry-leading halo, XREAL’s financial performance reveals the common challenges faced by all hard-tech startups: the long and difficult road to scale profitability.

The prospectus shows that from 2023 to 2025, XREAL’s revenue was 390 million yuan, 394 million yuan, and 516 million yuan, respectively, but it still incurred losses of 882 million yuan, 709 million yuan, and 456 million yuan, with a total loss exceeding 2 billion yuan over three years. However, the loss margin has narrowed. As of the end of 2025, the company’s cash and cash equivalents were only 63.36 million yuan.

XREAL explained that the main reason for the losses in the prospectus was the fair value changes of preferred shares, warrants, and convertible notes, which are accounting fluctuations rather than actual operational losses. The company stated that such losses would cease after going public. The losses are also related to R&D expenses and global market education and channel development costs for emerging AR glasses during the reporting period.

However, the prospectus shows that R&D expenditure has decreased year by year. XREAL’s R&D spending was 216 million yuan in 2023, 204 million yuan in 2024, and 183 million yuan in 2025. The company believes that the reduction in R&D spending is due to progress in R&D cycles.

Currently, AR glasses face obvious shortcomings, with an industry “impossible triangle”—the difficulty of achieving lightweight design, ultra-high battery life, and immersive display simultaneously in one product.

This means XREAL still needs continuous R&D investment. Judging by the fundraising, the decision to go public now reflects its dedication to R&D.

The prospectus states that XREAL plans to continue developing the X-Prism optical solution and next-generation near-eye display technology, including improving display performance and expanding the field of view, as well as purchasing R&D equipment and establishing pilot production lines for next-generation optical display solutions.

Meanwhile, the company will procure GPU computing devices, high-performance storage systems, and specialized testing equipment to build internal AI and rendering computing capabilities, including hardware testing, electromagnetic compatibility (EMC), RF antenna, and acoustic laboratories.

XREAL’s intense R&D investment underscores the fierce competition in the current smart glasses market, especially as giants like Apple and Meta deepen their layouts.

According to iResearch, in 2025, the global AR glasses market remains relatively concentrated, with the top five brands accounting for 80.3% of total sales revenue. Among these, four are from China, and one from the US.

[Chart omitted]

According to the notes in the prospectus, the second-ranked company was founded in 2021, focusing on European and American markets, possibly Viture; the third was founded in 2014, with its own operating system, possibly Rokid; the fourth was founded in 2021, mainly offering entry-level high-cost-performance products, possibly Raytheon Innovation; and the fifth, a US company founded in 2004, is a leading AI software ecosystem giant, possibly Meta.

In external competition, Viture is XREAL’s most direct rival. Last September, XREAL initiated a patent infringement lawsuit against Viture at the Munich District Court in Germany, seeking an injunction to prohibit the offering, sale, and import of several AR products marketed under the “VITURE” brand, especially the “Viture Pro XR” model. Subsequently, both sides engaged in patent battles in the US, China, and other regions.

XREAL admits that intellectual property litigation will incur high costs and may distract management’s attention and resources, potentially delaying the launch and implementation of new technologies.

In June last year, tech entrepreneur Luo Yonghao publicly stated that AR business had burned a lot of money, confirming that AR glasses are unlikely to commercialize within ten years. In the current period where AR technology is still climbing and mass application scenarios have not yet exploded, convincing capital markets to pay for its long-term value is undoubtedly a tough challenge.

This IPO by XREAL may serve to verify whether the current industry hype is a short-lived concept carnival dependent on capital infusion or a long-term promising future worth betting on.