Nothing's AI-First Pivot: Smartwatch, Smart Glasses, and the End of the CMF Phone

The Big Bet: $200 Million for an AI-Native Future

In September 2025, Nothing closed a $200 million Series C funding round led by Tiger Global, valuing the company at $1.3 billion. Other participants included GV (Google Ventures), Highland Europe, EQT, Qualcomm Ventures, and Zerodha co-founder Nikhil Kamath . The company explicitly stated that the funds would support its transition into an AI-native platform company .

The new funding took Nothing's total capital raised to over $450 million . In a statement at the time, Pei said: "For AI to achieve its maximum potential, consumer hardware must evolve in tandem with it."

Essential OS: The Software Foundation

Nothing laid the groundwork for its AI-native operating system in September 2025 with the launch of Essential . Described as the company's first step toward an AI-native OS, Essential includes two core components :

• Essential Apps: A tool that lets users create personalized apps using natural-language prompts. For example, a user can describe a task—"capture receipts from my camera roll and export a finance-ready PDF every Friday"—and the AI generates the app .
• Playground: A community platform where users can share, remix, and download creations including apps, camera presets, and EQ profiles .

The full Essential OS is slated for release in the first half of 2027 . Carl Pei has publicly argued that AI agents will eventually replace traditional smartphone apps, driving Nothing's bet on an OS where the interface adapts per user rather than relying on a grid of app icons .

First-Wave AI Products (Reportedly September 2026)

According to reports from Smartprix and Gizmochina, the initial wave of AI-first devices includes :

• Nothing Smartwatch – AI-powered, with the brand's signature transparent design
• CMF Ear Clip Buds – open-ear clip-on earbuds
• Nothing Headphones Gen 2 – over-ear headphones with AI enhancements
• CMF Speakers – the brand's first entry into the speaker category

The company is reportedly reallocating engineering resources away from Android phones to these new categories .

Smart Glasses Targeting H1 2027

Bloomberg reported in April 2026 that Nothing plans to release AI-enhanced smart glasses in the first half of 2027. The glasses are expected to feature cameras, microphones, and speakers, connecting to a smartphone and the cloud for AI processing . Pei was initially resistant to the idea of smart glasses but has since told employees he wants to focus on a multi-device strategy .

Internal Restructuring and Layoffs (July 2026)

In late July 2026, a report from Digit claimed that Nothing was planning to exit 12 international markets and reduce its global workforce by approximately 40%, with R&D hubs in China and London most affected .

Nothing's co-founder Akis Evangelidis responded publicly on X, calling the market-exit claims "FAKE NEWS" . In the same statement, however, he confirmed that the company is reorganizing and laying off staff as part of a move to establish a new AI-native business unit . Evangelidis said the reported numbers were "way overblown" and that Nothing is consolidating operations into regional hubs . Separately, CityAM reported that more than 100 of Nothing's approximately 800 global employees could be affected by cuts, with roughly 25 UK marketing roles at particular risk .

The CMF Budget Smartphone Is Dead (For Now)

Nothing's budget-focused sub-brand CMF will not launch a new smartphone in 2026 . Co-founder Akis Evangelidis confirmed the cancellation, citing soaring RAM and memory component costs that made the sub-$250 price point financially unviable . Nothing instead launched the Phone (4b) under its main brand as a replacement, which sold 29,537 units on day one according to the company .

The CMF brand itself was spun off into a standalone India-based company in September 2025, with a planned investment of over $100 million and a target of creating at least 1,800 jobs over three years .

Smartphone Uncertainty: No Longer the Main Event

Multiple reports indicate Nothing is reducing resources allocated to Android phone development . The exact trajectory remains unclear. Two scenarios are in play:

• Reduced lineup: Nothing may trim its phone lineup to just one or two flagship devices (e.g., the Phone series) while the CMF budget line remains paused .
• Aggressive phase-out: Smartphones could be de-emphasized more aggressively as the company pivots entirely toward AI-native wearables and audio .

Nothing's own reported language—"phones aren't going away, they're just no longer the main event"—suggests a gradual de-emphasis rather than an abrupt exit . The final path likely depends on market reception of the September 2026 AI-first product wave and the success of Essential OS in 2027.