Saudi Arabia has taken majority share of the US-based augmented reality company Magic Leap, The Telegraph reports, widening the stake via its state-owned sovereign wealth fund with a deal amounting to $450 million.

Citing delayed accounts obtained from its European division, the company is said to have raised $150 million in preferred convertible stock and $300 million in debt from Saudi Arabia’s Public Investment Fund (PIF) over the course of 2022. The investment puts the country’s ownership of Magic Leap over 50 percent, giving it overall majority control.

The Telegraph reports that, as of November 2022, Saudi Arabia’s PIF is “entitled to appoint four of the eight directors of the board of directors of Magic Leap.”

The wealth fund, which is controlled by Crown Prince Mohammed bin Salman, invests in projects considered to be strategically significant to diversifying its national economy.

Through PIF, Saudi Arabia owns minority stakes in Uber, Capcom, Nexon, Live Nation, Boeing, Meta, Alphabet, Citigroup, Disney, and Bank of America to name a few. It also owns Premier League football team Newcastle United and LIV Golf, a challenger to the PGA Tour.

Photo by Road to VR

Founded in 2010 by Rony Abovitz, the Plantation, Florida-based company kicked off its consumer ambitions with a long and ambitious tease of its first AR headset, Magic Leap 1 (previously styled ‘One’), starting its marketing campaign as it emerged from stealth in 2014.

Released nearly four years later, the developer-focused ‘Creator Edition’ headset was initially priced at an eye-watering $2,300, which not only deflated some of the potent hype behind the unicorn startup, but also cemented a long and bumpy road ahead if Magic Leap wanted to eventually offer its tech at a consumer price point.

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Having awkwardly straddled the prosumer segment with limited success, in mid-2020 Abovitz announced he would be stepping down as CEO, signaling a pivot that would refocus the company’s efforts on servicing enterprise instead of consumers. Shortly afterward, Microsoft’s Executive VP of Business Development Peggy Johnson took the reins as CEO of Magic Leap.

The company has since released its follow-up headset, Magic Leap 2, to enterprise partners and through third-party vendors, putting the device in direct competition with Microsoft’s HoloLens 2.

To date, Magic Leap has raised $4 billion, with minority investors including Google, Alibaba, Qualcomm, AT&T, and Axel Springer.

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Well before the first modern XR products hit the market, Scott recognized the potential of the technology and set out to understand and document its growth. He has been professionally reporting on the space for nearly a decade as Editor at Road to VR, authoring more than 3,500 articles on the topic. Scott brings that seasoned insight to his reporting from major industry events across the globe.
  • PIF owned more than 50% of Magic Leap since 2021. So the report isn’t totally accurate.

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    No mention of how Saudi Arabia is a genocidal dictatorship, killing tens of thousands of people in Yemen, the leading mafia oil state, or a state sponsor of terror? I really feel like the ironclad apolitical status of the tech press needs to have some line where they report on things like the real world matters as much as VR headsets.

    • TheAK

      Go to a world news site then, I don’t want politics in my gaming news.

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        This isn’t a gaming news site. It’s a technology site about an industry.

    • It’s also a people who don’t particularly dream in oppression, trying to desal enough water and run something on hydrogen safely. Let it dream peace with fewer and fewer iron fists…

  • It’s not the dumbest thing Saudi princes have thrown money at. Maybe it’ll make money…. someday…