Edge artificial intelligence (AI) is on the rise, with tech giants accelerating their deployments and reshaping the smart device ecosystem.

Last Thursday, Alibaba launched its first AI-powered glasses, "Quark," priced starting at 1,899 yuan, deeply integrating its Qianwen AI model and Alibaba ecosystem services. Just four days later, ByteDance introduced its Doubao AI phone assistant, embedded directly into the operating system to enable complex cross-app functions like price comparisons and ordering. This surge in edge AI hardware signals a rapid shift from cloud-based AI to on-device applications.

According to China Securities estimates, AI adoption in smartphones and PCs is projected to reach 45% and 62%, respectively, by 2026. The edge AI market is expected to grow from 321.9 billion yuan in 2025 to 1.22 trillion yuan by 2029, with a 40% annual growth rate. Over a month ago, Shanghai’s Municipal Commission of Economy and Informatization released an action plan to boost edge AI chip development, injecting momentum into the sector.

This wave of edge AI is set to redefine smart device ecosystems—from interaction methods to system architectures and business models—creating growth opportunities for upstream chipmakers, midstream hardware manufacturers, and downstream software providers. Smart glasses, for instance, are forecast to surge from 1.52 million units sold in 2024 to 60 million by 2029, emerging as a key AI platform after smartphones and PCs.

**Edge AI Advantages and Policy Support** Edge AI offers distinct advantages over cloud-based solutions. Qualcomm’s whitepaper highlights its strengths in cost efficiency, energy savings, reliability, privacy, and personalization. While cloud AI costs escalate with user growth, edge processing alleviates infrastructure strain. Additionally, edge AI runs generative models with lower energy consumption, avoids cloud latency, and keeps sensitive data local.

Policy tailwinds further bolster the sector. On October 14, Shanghai’s action plan emphasized edge AI chip development across X86, ARM, and RISC-V architectures for devices like phones, computers, and glasses. In August, China’s State Council outlined goals for next-gen smart devices to achieve over 70% penetration by 2027 and 90% by 2030. These coordinated policies are driving growth across the AI consumer electronics supply chain, with Shanghai at the core of the Yangtze River Delta’s AI ecosystem.

**Tech Giants Race for Edge AI Dominance** Alibaba’s Quark glasses, equipped with Qianwen AI and Alibaba ecosystem apps (Alipay, Amap, Taobao, Fliggy), feature dual-optical displays, 4,000 nits brightness, and bone-conduction audio. Priced from 1,899 yuan, they mark Alibaba’s push into consumer wearables.

ByteDance’s Doubao assistant takes a more aggressive approach by embedding AI at the OS level. It executes multi-step tasks—like comparing KFC prices across JD.com, Meituan, and Taobao—via natural language commands, with a dedicated hardware button and screen-reading capabilities.

These divergent strategies—Alibaba’s vertical integration versus ByteDance’s system-level overhaul—highlight the competitive dynamics accelerating edge AI innovation.

**Redefining Smart Devices** Edge AI is transforming smart devices in three key dimensions: 1. **Interaction**: The shift from GUI (Graphical User Interface) to LUI (Language User Interface) lets users achieve results via natural language commands. 2. **Architecture**: AI agents now autonomously handle planning, sensing, decision-making, and execution, moving beyond tool-based functions. 3. **Ecosystem**: Devices evolve from single-purpose tools to multi-scenario platforms, as seen in Honor’s "1×3×N" strategy linking education, smart homes, wearables, and more.

**Supply Chain Opportunities** The edge AI boom is fueling growth across the value chain: - **Hardware**: Key players include chipmakers like Cambricon and Loongson, foundries like SMIC and Hua Hong, and packaging firms like JCET and TFME. - **Applications**: Smartphone supply chains (Luxshare, Wingtech) and AIoT specialists (Espressif, Rockchip) stand to benefit.

Smart glasses, a major edge AI vehicle, are poised for explosive growth. WellsennXR projects global sales to hit 600,000 units by 2029, while China’s market is forecast to grow 216% year-on-year in 2025.

With technological advances, policy support, and rising demand, edge AI is entering a golden era, offering investors fresh opportunities in this transformative sector.