How the Humane AI Pin Failed

Days before gadget reviewers opined on the Humane Ai Pin, a futuristic wearable powered by artificial intelligence, the company's founders gathered their employees and encouraged them to prepare. Reviews could be disappointing, they warned.

Humane founders Bethany Bongiorno and Imran Chaudhri were right. In April, reviewers brutally panned the new $699 product, which Humane had marketed for a year with ads and at glitzy events like Paris Fashion Week. The Ai Pin was “totally broken” and had “glaring flaws,” some reviewers said. One declared it “the worst product I have ever reviewed”.

About a week after the reviews were published, Humane began talking to HP, the computer and printer company, about selling itself for more than $1 billion, three people familiar with the conversations said. Other potential buyers have emerged, although talks have been casual and no formal sales process has been initiated.

Humane has appointed Tidal Partners, an investment bank, to help it navigate discussions and also manage a new financing round that would value it at $1.1 billion, three people familiar with the plans said.

The developments amount to an intervention by Humane, which had positioned itself as a major contender among a wave of AI hardware makers. The San Francisco company had raised $240 million from powerful Silicon Valley investors, including Sam Altman, CEO of OpenAI, and Marc Benioff, CEO of Salesforce, who valued the start-up at $1 billion in based on its enormous ambition and promise. Humane spent five years building a device to revolutionize the smartphone, only to fail.

As of early April, Humane had received about 10,000 orders for the Ai Pin, a small fraction of the 100,000 it hoped to sell this year, two people familiar with its sales said. In recent months, the company has also addressed employee departures and changed its repatriation policy address canceled orders. On Wednesday it asked customers to stop using the Ai Pin charging case due to the fire risk associated with the battery.

Its setbacks are part of a series of stumbles in the world of generative artificial intelligence, as companies release unpolished products. Over the past two years, Google has introduced and scaled back AI search capabilities that recommended people eat rocks, Microsoft trumpeted a Bing chatbot that gave people hallucinations, and Samsung added AI features to a smartphone that was defined as “excellent at times and disconcerting at others”. “

In an interview, Ms. Bongiorno and Mr. Chaudhri, who are married, declined to comment on a possible sale or fundraising for Humane. They said their ambitions for the Ai Pin haven't changed, but acknowledged there's a difference between testing a device and actually using it.

“Not everything is known before launch,” Bongiorno said. Given the product reviews, Chaudhri said, “they definitely wish we were able to solve some of these things a little differently.”

HP did not respond to requests for comment.

This account by Humane is based on interviews with 23 current and former employees, consultants and investors, who requested anonymity because they were not authorized to speak publicly about the matter or feared retaliation. Bloomberg previously reported on the potential sale of the start-up.

Many current and former employees said Mr. Chaudhri and Ms. Bongiorno preferred positivity to criticism, leading them to ignore warnings about the Ai Pin's poor battery life and power consumption. A senior software engineer was fired after raising questions about the product, they said, while others left out of frustration.

Chaudhri said his company, which at its peak had 250 employees, encouraged workers to offer feedback. The departures were a natural consequence of the transition from creating a new device to maintaining it after its release, which he said appealed to “a different kind of person.”

Chaudhri and Bongiorno, who both worked at Apple, founded Humane in 2019. They decided to create a pin that could be attached to clothing with a magnet. The device gives users access to an AI-powered virtual assistant that can send messages, search the web or take photos. It is complemented by a laser that projects text onto the user's palm for tasks such as skipping a song while playing music. It also has a camera, speaker, and cell service.

From the beginning, current and former employees said the Ai Pin had problems, which auditors later identified.

One was the device's laser display, which consumed enormous power and caused the pin to overheat. Before showing the gadget to potential partners and investors, Humane executives often chilled it on ice packs so it would last longer, three people familiar with the demonstrations said. These employees said such measures may be common early in the product development cycle.

When employees expressed concern about the heat, they said, Humane's founders responded that software improvements that reduce energy use would fix the problem. Mr. Chaudhri, the design chief, wanted to keep the gadget's sleek design, three people said.

The device's battery wasn't big enough to last long. Test units sold out within hours, current and former employees said. Humane decided to provide customers with a spare battery and charging case, which increased the price of the product by more than $100, two employees said.

The problems contributed to Humane's shipping date for the device being pushed back to April from October, employees said.

Some employees tried to convince the founders not to launch the Ai Pin because it wasn't ready, three people said. Others have repeatedly asked them to hire a marketing manager. The role remained vacant prior to the product's release.

In October, Time magazine named Ai Pin one of the best inventions of 2023. The following month, Humane revealed details of the product, promoting it in commercials.

But orders have been slower than expected, three people said, leading Humane to scale back plans to produce more devices. Ms. Bongiorno declined to comment on the sales.

In January, Humane laid off about 10 employees. A month later, a senior software engineer was fired after asking whether the Ai Pin would be ready by April. In a company meeting after the firing, Mr. Chaudhri said the employee had violated policy by speaking negatively about Humane, two attendees said.

Ms. Bongiorno said the company could not comment on individual employees.

The founders said they spoke with several reviewers as they evaluated the device and answered questions about their experiences, which included concerns about the Ai Pin's temperature and inaccurate responses to some requests.

On April 11, reviews from The New York Times, The Wall Street Journal, and The Verge called out Ai Pin's flaws. Marques Brownlee, a tech reviewer on YouTube with 19 million subscribers, titled his review “Worst product I've ever reviewed… so far.”

After the reviews, Bongiorno said, “we got the team together and said, 'OK, look, this is going to be painful. We will have to lean on painful feedback.'”

Ms. Bongiorno and Mr. Chaudhri said Humane had been working on the device's problems. The startup has added more voice navigation options to the device, as well as sound effects, to make it easier to use. The updates include the integration of OpenAI's latest chatbot system, GPT-4o, designed to improve battery life by 25% and reduce the device's response time to two seconds.

Those updates addressed questions raised by auditors, the founders said. Ms. Bongiorno called the reviews and feedback “a gift given to us.”

Companies are interested in the device, he added. Within 48 hours of its launch, more than 1,000 companies – including retail, medical and education sectors – reached out to discuss possible collaboration or creating pin software, Bongiorno said.

Humane has also signed deals with wireless carriers to expand Ai Pin into South Korea and Japan.

Some discussions, including with HP, have turned into talks about a potential sale, as well as licensing Humane's technology, three people familiar with the situation said. The conversations led Chaudhri and Bongiorno to hire Tidal Partners, an investment bank that had advised Cisco on its recent $28 billion acquisition of cybersecurity company Splunk.

These talks continued as Humane dealt with the discovery that a battery supplier had supplied components that could pose a fire risk. On Wednesday she asked customers to stop using the charging case accessory while she worked to find a new supplier.

Humane had enough money to release its device, people close to the company said, but was trying to raise more.

“We just want to build,” Bongiorno said.

Chaudhri added: “We need to consider how best to finance it.”

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