Days before gadget reviewers weighed in on the Humane Ai Pin, a futuristic artificial intelligence-powered wearable device, the company's founders gathered and encouraged their employees. He warned that the reviews could be disappointing.
Human's founders, Bethany Bongiarno and Imran Chaudhry, were right. In April, reviewers panned the new $699 product, which Human had marketed for a year with ads and at glitzy events like Paris Fashion Week. The Ai pin was “completely broken” and had “obvious flaws”. One declared it “the worst product I've ever reviewed.”
About a week after the reviews came out, Human began talking to computer and printer company HP about selling itself for more than $1 billion, three people with knowledge of the conversations said. Other potential buyers have emerged, although negotiations have been sporadic and no formal sale process has begun.
Human has retained Tidal Partners, an investment bank, to help navigate negotiations and manage a new funding round that will be valued at $1.1 billion, according to people familiar with the plans. Three people said.
The development is on par with Human's Face Plant, which positioned itself as a top contender among a wave of AI hardware makers. The San Francisco company had raised $240 million from powerful Silicon Valley investors, including OpenAI chief executive Sam Altman and Salesforce chief executive Marc Benioff, underpinning its ambitious ambitions and promise. The startup was valued at $1 billion. Human spent five years creating a device to disrupt the smartphone – only Flounder.
As of early April, Human had received about 10,000 orders for the Ai Pin, a small fraction of the 100,000 it expected to sell this year, two people familiar with its sales said. In recent months, the company has also grappled with employee departures and changed its return policy. Address of canceled orders. On Wednesday, it asked consumers to stop using the Ai Pin charging case because its battery poses a risk of fire.
Its failures are part of a pattern of stumbling around the generative AI world, as companies release unpolished products. Over the past two years, Google has introduced and rolled back AI search capabilities that recommend people eat rocks, Microsoft has tricked out a Bing chatbot and Samsung has rolled out such a smartphone. Added AI features that were called “excellent at times and surprising at others”. “
In an interview, Ms. Bongiorno and Mr. Chaudhary, who are married, declined to comment on potential sales or fundraising for Humane. He said his ambitions for the Ai Pin haven't changed, but acknowledged there's a difference between testing the device and actually using it.
“You don't know everything before you launch,” Ms. Bongiarno said. Looking at product reviews, Mr. Chaudhry said, “They definitely wish we could address some of these things a little differently.”
HP did not respond to requests for comment.
Human's account 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 fear retaliation. It was feared. Bloomberg previously reported a possible sale of the startup.
Many current and former employees said that Mr. Chaudhary and Ms. Bongiorno preferred positivity over criticism, leading them to ignore warnings about Ai Pin's poor battery life and power consumption. He said a senior software engineer was fired after raising questions about the product, while others were left frustrated.
Mr Chaudhary said his company, which had 250 employees at its peak, encouraged workers to offer feedback. The departure was 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”.
Mr. Chaudhry and Ms. Bongiorno, who both worked at Apple, launched Human in 2019. They set out to create a lapel pin that sticks 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. This is complemented by a laser that projects text onto the palm of the user's hand for tasks such as skipping a song while playing music. It also has a camera, speaker and cellular service.
From the beginning, current and former employees said, Ai Pin had problems, which were later picked apart by reviewers.
One device had a laser display, which used a lot of power and caused the pin to overheat. Before showing the gadget to potential partners and investors, Human executives often chill it on ice packs to make it last longer, said three people familiar with the demonstrations. Such initiatives can be common early in the product development cycle, these employees said.
When employees raised concerns about the heat, he said, Human's founders responded that software improvements to reduce power consumption would fix it. Mr. Chaudhry, who led the design, wanted to retain the sleek design of the gadget, three of the people said.
The battery of the device was not big enough to last long. Current and former employees said the test units lost power within hours. Human decided to provide customers with a backup battery and charging case, raising the price of the product by more than $100, two employees said.
Employees said the problems contributed to Human pushing back the date it would ship the device from October to April.
Some employees tried to convince the founders not to launch Ai Pin because it wasn't ready, the three people said. Others repeatedly asked him to hire a head of marketing. This role remained vacant prior to the product release.
In October, Time magazine named Ai Pin one of the best inventions of 2023. The following month, Human revealed the details of the product, promoting it in advertisements.
But orders were lower than expected, three of the people said, causing Human to scale back plans to produce more devices. Ms. Bongiorno declined to comment on the sale.
In January, Human laid off about 10 employees. A month later, a senior software engineer was let go after he questioned whether A-PIN would be ready by April. At a company meeting after the dismissal, Mr. Chaudhary and Ms. Bongiorno said the employee had violated policy by speaking negatively about Human, two attendees said.
Ms Bongiarno said the company could not comment on individual employees.
The founders said they spoke with several reviewers as they reviewed the device and answered questions about their experiences, including concerns about Ai Pin's temperature and incorrect responses to some requests. .
On April 11, reviews by The New York Times, The Wall Street Journal and The Verge exposed Ai Pin's shortcomings. Marquez Brownlee, a tech reviewer with 19 million subscribers on YouTube, captioned his review “Worst product I've ever reviewed … for now”.
After the reviews, Ms. Bongiarno said, “We got the team together and we said: 'OK, look, this is going to hurt. We're going to have to lean into the hurtful feedback.'”
Ms. Bongierno and Mr. Chaudhary said that Human has since worked on the device's problems. The startup has added more voice navigation options as well as sound effects to the device to make it easier to use. Updates include OpenAI's latest chatbot system, GPT-4o, and one that improves battery life by 25 percent and shortens the device's response time by two seconds.
The founders said that these updates have addressed questions raised by reviewers. Ms. Bongiorno referred to the reviews and feedback as “a gift that has been given to us.”
He added that businesses are interested in the device. Within 48 hours of its launch, more than 1,000 companies — including retail, pharmaceuticals and education — reached out to discuss potentially working together or building software for PIN, Ms. Bongiarno said. .
Human has also signed wireless carrier deals to expand Ai Pin to South Korea and Japan.
Some of the talks, including with HP, have turned into talks about a potential sale as well as licensing of Human's technology, three people familiar with the situation said. The negotiations led Mr. Chaudhry and Ms. Bongiorno to hire Tidal Partners, an investment bank that advised Cisco on its recent $28 billion acquisition of cybersecurity business Splunk.
Those discussions continued as Human dealt with its discovery that the battery supplier had supplied components that could pose a fire hazard. On Wednesday, it asked customers to stop using its charging case accessories while it worked to find a new vendor.
Human had enough money to release its device, but was trying to raise more money, people close to the company said.
“We just want to build,” Ms. Bongiarno said.
“We have to look at how best we fund it,” added Mr Chaudhary.