AI hardware is in its put up or shut up era.

It’s much harder to say whether any of them will implement chatbots and agents well or in new and exciting ways. While the addition of AI may have been enough to garner the investment needed to build a device, it may not be enough to get people to actually buy the thing. Chatbots and AI agents still don’t provide enough of a usage example to justify people pinning them to their shirts en masse. We are also in a moment of AI saturation where technology is in everything. So what makes your AI headphones special?

“That’s the problem a lot of these startups have; if AI is their differentiator, then what happens when everyone has it?” Sag says. “Stakes are now on the table.”

Wearables and devices designed specifically to provide some AI-powered services may have seemed like the logical next step in the evolution of AI, but so far the utility we get from them doesn’t exceed any limits.

“The reality is that we don’t need dedicated hardware for the kind of features or use cases that they show,” Ubrani says. “Your phone can do most of these things.”

Within a year, AI went from being a stand-alone selling point to something akin to a slightly more powerful form of vanilla.

Making a dent

Of course, there are AI hardware success stories such as Meta-Ban Ray smart glasses that did a good job of incorporating AI as one of many functions in a device that offers use cases – taking pictures, listening to music – far beyond what AI can do on its own. (This is sure to be a year complete with smart glassesand CES will be overflowing with them, too.)

Meta, of course, is one of those giant companies with the resources to put into incorporating AI into their services. Smaller manufacturers may not have the financial stamina to compete, but they still feel pressure to get in the game.

“It’s going to be hard to see how these smaller startups survive,” Sag says.

Sagg says there are ways to stand out from the big devices and the plethora of other AI gadgets in the mix. Privacy, for example. Meta may have the most successful smart glasses out there right now, but the company’s platform is a data vacuum that sucks out just about any information about its users that it can. Sag points to competitors like Even realities or Looktech.AIthat make smart glasses that allow extensive user controls over privacy settings and don’t necessarily just send every bit of data back to the mothership. He says startups like these can use the more secure approach to differentiate their products, offering consumers an alternative to big data mining platforms.

No matter how safe and secure the technology is, people will still want something that basically does something useful for them.

“The next kind of wave of that is, well, what is AI doing for me right now other than telling me I have AI?” Sagg says. “Many AIs don’t necessarily drive sales because they don’t actually change people’s lives.”