The market for AI devices will exceed the smartphone market because it encompasses not just phones but a new generation of wearables (glasses, rings, watches) that will serve as constant companions connected to AI agents.
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AI devices must be close to human senses to be effective. Glasses are the most natural form factor as they capture sight, sound, and are close to the mouth for speech. This sensory proximity gives them an advantage over other wearables like earbuds or pins.
Startups are overwhelmingly focusing on rings for new AI wearables. This form factor is seen as ideal for discrete, dedicated use cases like health tracking and quick AI voice interactions, separating them from the general-purpose smartphone and suggesting a new, specialized device category is forming.
The ultimate winner in the AI race may not be the most advanced model, but the most seamless, low-friction user interface. Since most queries are simple, the battle is shifting to hardware that is 'closest to the person's face,' like glasses or ambient devices, where distribution is king.
Demis Hassabis suggests that previous attempts at smart glasses like Google Glass were too early because they lacked a compelling use case. He believes a hands-free, always-on AI assistant like Project Astra provides the 'killer app' that will finally make smart glasses a mainstream consumer device.
The sales growth of smart rings has surpassed that of smartwatches, indicating a consumer shift toward less intrusive technology. Users increasingly want the data-tracking benefits of wearables without the constant distraction of a screen on their wrist. This trend favors 'hidden tech' that integrates seamlessly and invisibly into daily life while allowing for traditional analog accessories.
Leaks about OpenAI's hardware team exploring a behind-the-ear device suggest a strategic interest in ambient computing. This moves beyond screen-based chatbots and points towards a future of always-on, integrated AI assistants that compete directly with audio wearables like Apple's AirPods.
Unlike the vertically integrated smartphone market, AI wearables will be dominated by a horizontal model where diverse fashion brands integrate technology. Consumers will prioritize personal style and choice, preventing a single tech giant from winning with one design.
Qualcomm's CEO argues that real-world context gathered from personal devices ("the Edge") is more valuable for training useful AI than generic internet data. Therefore, companies with a strong device ecosystem have a fundamental advantage in the long-term AI race.
AI accelerates AR glasses adoption not by improving the display, but by changing how we compute. As AI agents operate software, our role shifts to monitoring, making a portable, multi-screen AR workstation more useful than a single-task phone.
Current devices like phones and computers were designed before the advent of human-like AI and are not optimized for it. Figure's founder argues that this creates a massive opportunity for a new class of hardware, including language devices and humanoids, which will eventually replace today's dominant form factors.
