Tech Giants Face Mixed Fortunes: Meta's VR Losses Deepen, Microsoft Gains from OpenAI, and Tesla Ends Model S/X Production
Several major technology companies reported significant developments this week, ranging from substantial financial losses in virtual reality to strategic shifts in product lines. Meta revealed deepening losses in its virtual reality division, while Microsoft saw a significant boost from its investment in OpenAI. Meanwhile, Tesla announced the end of production for its Model S and Model X models.
Meta's Reality Labs, the company's virtual reality unit, reported a loss of $19.1 billion in 2025, according to the company's earnings report released Wednesday. This figure surpasses the $17.7 billion lost in 2024. The unit's fourth-quarter loss alone amounted to $6.2 billion, set against sales of $955 million for the quarter and $2.2 billion for the year, according to TechCrunch. These losses come after Meta laid off 10 staff members from Reality Labs earlier this month, reportedly cutting as many as 1,000 employees. Despite the financial setbacks, Meta CEO Mark Zuckerberg struck an optimistic tone regarding the company's VR efforts during the earnings call, according to TechCrunch.
In contrast, Microsoft reported a $7.6 billion increase in net income from its investment in OpenAI, the AI lab behind ChatGPT, according to TechCrunch. This gain was revealed in Microsoft's latest quarterly earnings report released Wednesday. Microsoft has invested over $13 billion in OpenAI and reportedly has a 20% revenue share agreement with the company, although neither company has publicly confirmed the details. OpenAI is reportedly looking to raise additional funding at a valuation between $750 billion and $830 billion, according to Bloomberg. Microsoft and OpenAI renegotiated some of the terms of their deal in September when OpenAI restructured.
Tesla CEO Elon Musk announced Wednesday that the company is ending production of the Model S sedan and Model X SUV, according to TechCrunch. The final versions of both electric vehicles will be made next quarter. "It's time to basically bring the Model S and X programs to an end with an honorable discharge, because we're really moving into a future that is based on autonomy," Musk said during the company's quarterly earnings call. Tesla will continue to offer support for existing Model S and Model X owners for as long as people have the vehicles, according to Musk. Once production ends, Tesla will build Optimus robots in the same factory space in Fremont, California, according to Musk.
In other tech news, Nothing CEO Carl Pei confirmed that there will be no Nothing Phone 4 released this year, according to The Verge. Instead, the company will focus on improvements to the 4A series. "There's no new flagship this year," Pei said in a video on the brand's YouTube channel, emphasizing that last year's Phone 3 remains the brand's flagship phone.
Google is disabling some Phone app features on older Pixel devices after acknowledging a bug that inadvertently leaked audio to callers, according to The Verge. The issue affected the "Take a Message" and next-gen Call Screen features on Pixel 4 and Pixel 5 devices. Google is disabling these features to address the bug, which exposed background audio during missed calls under specific and rare circumstances, according to The Verge.
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