Regulatory Scrutiny from China Casts Shadow Over Meta’s Hardware Momentum

Meta Platforms finds itself navigating a complex regulatory challenge emanating from Beijing, coinciding with an unexpected surge in demand for its latest hardware. This juxtaposition presents a critical moment: just as the company's hardware division celebrates a genuine breakthrough with its smart glasses, a major $2 billion acquisition in the artificial intelligence sector has drawn the attention of Chinese authorities.

The company recently delivered surprising news at CES 2026 in Las Vegas. The international launch of its $799 smart glasses, developed in partnership with EssilorLuxottica, has been postponed indefinitely. This decision stems from overwhelming demand within the United States that has outstripped Meta's production capacity.

Key details of the hardware initiative’s current status include:
* Customer waitlists now extend deep into 2026.
* First-quarter sales reached 15,000 units.
* The product has captured a 6% market share in the Smartglasses category for the EMEA region, according to IDC data.
* Planned launches in the United Kingdom, France, Italy, and Canada have been deferred.

The glasses allow users to view video content, respond to messages, and interact with an AI assistant via neural technology in the accompanying wristband. At CES, Meta demonstrated new functionalities such as a teleprompter feature, enhanced pedestrian navigation across 32 cities, and additional control options through the Meta Neural Band.

Should investors sell immediately? Or is it worth buying Meta?

Chinese Ministry Reviews Manus AI Acquisition

Separately, Meta's strategic move to bolster its AI capabilities faces examination. China's Ministry of Commerce is conducting a review to determine if Meta violated export controls through its acquisition of the AI startup Manus. The investigation centers on whether the transfer of the startup's personnel and technology to Singapore prior to the sale should have required an export license.

Manus had generated significant interest before the takeover by unveiling an AI agent designed to make more autonomous decisions than competing products like ChatGPT or DeepSeek. This technology is seen as a potential accelerant for Meta's position in the generative AI race—provided the deal is not obstructed by Chinese regulators. Although the probe is in its early stages, it grants China considerable leverage over the transaction's outcome.

Competitors Eye Market Opening

Meta's supply chain difficulties may present a strategic opportunity for rivals. In May 2025, Alphabet announced a $150 million collaboration with Warby Parker. Meanwhile, reports suggest OpenAI is working with Apple on a dedicated AI glasses project. As Meta is forced to temporarily cede the international market, competitors could move to fill the void.

All eyes are now on Meta's upcoming earnings release scheduled for January 28, 2026. Investors are expected to focus intently on revenue figures from the Reality Labs division and the forward guidance for the hardware segment. Clarity regarding the status of the Chinese regulatory review will also be a key point of interest.