Author: Investment Community
"In the AI era, all hardware deserves to be remade."
This statement might have sounded a bit radical in 2024, but its value has increased dramatically since 2025. As we have seen, the AI smart hardware startup boom is underway, with funding pouring in. The latest valuation of Ora Health, a smart ring company across the ocean, has soared to an astonishing 70 billion yuan.
This frenzy has swept through FOMO investors. This time, in addition to reviewing thousands of business plan (BP) emails, they are surprisingly unanimous in focusing their deal sourcing efforts on content communities frequented by geeks and young people.
The underlying logic is quite simple: more than parameter lists and roadshows, what reveals the true needs of a consumer-grade AI smart hardware earlier is whether the product can be understood, discussed, and questioned in public.
Ultimately, all those technology products aimed at the general public must eventually be tested by the masses.
AI hardware boom fuels investor frenzy for underwater projects.
We are experiencing a big year for AI hardware.
Since 2025, the wearable device sector has expanded to include a surge in various smart hardware products such as AI glasses, AI toys, AI recording cards, AI rings, AI headphones, companion robots, and Agent Boxes.
Amidst this fervor, some details reveal the excitement within the investment community: Since the second half of 2025, we have frequently seen numerous leading institutions issuing job postings for AI/smart hardware investors, with almost all of them requiring applicants to be based in Shenzhen, the hardware capital.
Good projects are so sought after that investors are practically begging for their attention, especially those still in the early stages and with relatively low valuations. Investors are even starting to target promising companies that haven't yet left their jobs; for example, the coffee shop next to DJI is packed with VCs and FAs trying to persuade people to start their own businesses.
(Comments section of the pre-sale video for the AI-powered sticky note product)
"After this content was published, many technical discussions appeared in the bullet comments and comment section, and more users began to share their similar needs: some people mentioned that they often participate in cross-border exhibitions, some people talked about communication barriers when collaborating remotely with overseas teams, and some people shared their experiences of not having convenient translation tools when accompanying foreign relatives and friends to see a doctor or handling foreign affairs."
"This feedback not only helped us expand the direction of influencer content, but also directly influenced our thinking about the product line," Wu Zhen said.
(The comment section of the video by UP master Film Hurricane)
Audiophiles gathered
I still remember the CES conference in January 2024.
A small orange box called Rabbit R1, touted as "the first AI hardware device on Earth," has caused a sensation in the tech world. The market calls it the iPhone of the AI era, and it sold 100,000 units as soon as it was launched.
However, success did not follow immediately. On the contrary, criticisms arose that it was "not as good as a mobile phone in actual use." At the time, the wildly popular Rabbit R1 failed to adequately explain to users what the Rabbit R1 could actually do in the present and future, and what real problems its innovation could solve for users.
Even today, user education remains the most important issue for AI smart hardware. When AI enters consumer electronics, the product consumption logic is no longer limited to "improving life efficiency," but also includes higher-level needs such as "unleashing personal creativity" and "liberating the brain." At this point, whoever can get users to understand, discuss, and pay for it in real-world scenarios has truly crossed the threshold from technology product to consumer product.
But this is not easy. Regarding user education for AI glasses, INMO's CMO Wu Zhen told us frankly: It's not simply about conveying product information; it also requires overcoming a psychological barrier. Users need to mentally "try it on" first, confirming that the device integrates naturally and seamlessly into their daily lives before they can move on to the next step.
In Wu Zhen's view, the process of building a psychological foundation for AI smart hardware users may take longer than for most consumer electronics categories. "When users naturally put on AI glasses and go out without having to remind themselves 'I need to use AI glasses today,' this change in behavior may be more convincing than a lot of data."
The reshuffling begins, and the battle for attention begins.
As the frenzy reaches its peak, a reshuffling is already underway.
There is now a consensus in the market that 2026 will be the year of commercial validation for AI hardware. This also means that those chasing trends and the frenzied capital will begin to act rationally and calmly.
A dramatic shakeout is unfolding: By the end of 2025, the AI wearable device Friend AI Necklace had stalled after facing severe market resistance; after a brief peak in 2024, Rabbit R1 suffered from an abnormally high return rate and a severe decline in reputation due to negative feedback about its inadequate product capabilities, ultimately leading to unpaid wages and a cash flow crisis.
Meanwhile, savvy players have begun to carefully adjust and optimize their decisions. In February 2026, news circulated that the Doubao AI glasses project had been suspended, meaning that this product line was no longer considered a viable direction, at least for the foreseeable future. Earlier, in January, smartphone manufacturer vivo halted its AI glasses project, citing the difficulty of achieving differentiation at present.
All of these factors reflect the industry's differentiation.
However, it's undeniable that this trillion-dollar sector still offers entrepreneurs tremendous opportunities with a high degree of certainty. According to AICC forecasts, the global AI-related hardware market will easily surpass several trillion US dollars by 2030. In China, the industry predicts that the market size of consumer AI hardware (excluding mobile phones and automobiles) will exceed 1.27 trillion yuan in 2026 and reach 2.56 trillion yuan by 2030.
Opportunities for exiting and entering the market coexist. OpenAI has just announced that it will launch its first AI hardware device in the second half of the year, and Meta plans to double its annual production capacity of AI smart glasses to 20 million units by the end of 2026. In China, JD.com is preparing to launch a batch of AI smart terminals, including AI desk lamps, AI cooking machines, AI mattresses, and AI wheelchairs.
People remain convinced that the battle for access points behind AI smart hardware will not stop, and that the AI era will still be an era of user sovereignty.
The heatwave will push everyone forward. But when attention, product strength, and user perception begin to clash on the same table, the final battle has only just begun.
