Augmented reality startup Magic Leap was founded in 2014. It demonstrated a new kind of technology called "light field signal generation" that promised to be far superior to existing augmented reality and virtual reality technology. It received $2.6 billion in funding from investors including Andreessen Horowitz, Kleiner Perkins, and Google.
In 2018 Magic Leap released a headset called the Magic Leap One, which almost everyone was disappointed with. The problem with it, according to this Tech Crunch article is that Magic Leap pulled a bait-and-switch. It did not use light field signal generation. It used the same kind of technology found in other augmented reality headsets released by Microsoft and others years earlier.
It appears Magic Leap was unable to sufficiently miniaturize the groundbreaking technology. From Tech Crunch:
As The Information's Reed Albergotti revealed more than three years ago, "The Beast" was Magic Leap's original demo box. It was everything people said. It was stunning, dreamlike, breakthrough technology. And it weighed "several hundred pounds."
"The Beast" was followed by "The Cheesehead," which fit on a human head, and "showed they could miniaturize the light field signal generator they'd invented" … but still weighed "tens of pounds," obviously far too heavy for any real-world applications. (There are pictures of both in the linked CNET piece.)
"The Beast" and "The Cheesehead" help explain the multiple rounds of massive venture investment. But then — could Magic Leap miniaturize their breakthrough technology further, to anything actually releasable?
Clearly they could not, and that's the crux of the matter, the answer to how and why Magic Leap raised $2.6 billion dollars, then laid off half its employees, while hardly releasing anything at all in seven years.