The news: Amazon is acquiring AI wearables company Bee, opening up a path for the Big Tech player to reenter the wearables field.

The startup sells $49.99 AI-powered watches, which record and transcribe all conversations.

Amazon said all Bee employees have been offered roles at the company. The value of the deal wasn’t disclosed.

Amazon previously explored wearables with Halo, a health- and fitness-focused wristband. The device was sunsetted and bricked in 2023 to cut costs, per CNBC.

Why Bee? Bee’s screenless smartwatch uses AI to analyze users’ conversations and create personalized to-do lists, summaries of chats, and a searchable history. The always-listening device could give Amazon a steady stream of unique user data.

Alternatively, Amazon could brick the Bee watch and instead use its technology to benefit other AI products, similar to what HP did with Humane’s Ai Pin.

Privacy concerns: An AI product that’s always listening may sound familiar. Devices like Amazon’s Alexa and Ray-Ban Meta Smart Glasses are betting that consumers will trade personal privacy for convenience.

Amazon’s acquisition could benefit from consumers’ high level of confidence in the Big Tech company—59% of US adults trust Amazon with their personal data, per All About Cookies, compared with 31% for Meta.

But not everyone is on board: “I instantly hit delete on everything. I’d rather retrain it than have my data go into Amazon,” one Bee user commented on an article from The Verge.

Bulking up the team: This deal—along with its hiring of several high-profile hardware and product executives from Microsoft since 2023, including former Microsoft CPO Panos Panay—may be accelerating Amazon’s return to wearables.

Bringing on employees with deep experience in consumer tech launches, hardware ecosystems, and cross-platform integration is critical for mainstream adoption of Bee’s product.

Our take: With Bee’s technology—and its endlessly refreshed user data—Amazon could incrementally improve its beleaguered Alexa or train future products.

If the company plans to keep Bee running, rather than cancel the product and use its software elsewhere, it could have substantial competition in the AI wearables space—especially if OpenAI launches an AI device.