Days before gadget reviewers reviewed the Humane Ai Pin, a futuristic wearable device powered by artificial intelligence, the company’s founders gathered their employees and encouraged them to prepare. Reviews can be disappointing, they warned.
Humane founders Bethany Bongiorno and Imran Chaudhri were right. In April, reviewers savaged the new $699 product, which Humane has been rolling out for a year with ads and at glitzy events like Paris Fashion Week. Ai Pin was “completely broken” and had “amazing flaws”, some critics said. Someone declared it “the worst product I’ve ever reviewed”.
About a week after the reviews came out, Humane began talking to HP, the computer and printer company, about being sold for more than $1 billion, three people with knowledge of the talks said. Other potential buyers have emerged, although talks have been casual and no formal sales process has begun.
Humane has retained Tidal Partners, an investment bank, to help navigate the discussions while managing a new round of financing that would be valued at $1.1 billion, three people with knowledge of the plans said.
The developments amount to a face factory for Humane, which had positioned itself as a leading contender among a wave of artificial intelligence 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 startup at $1 billion based on its enormous ambition and promise. Humane spent five years building a device to disrupt the smartphone — only to get sidetracked.
As of early April, Humane had received about 10,000 orders for 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 dealt with employee departures and changed a returns policy address of canceled orders. On Wednesday, it asked customers to stop using the Ai Pin charging case due to a fire hazard associated with its battery.
Its failures are part of a pattern of stumbles across the genetic AI world as companies release unpolished products. In the past two years, Google introduced and scaled back AI search features that recommended people eat rocks, Microsoft trumpeted a hallucinating Bing chatbot, and Samsung added AI features to a smartphone it called “brilliant at times and confusing at times.” 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 Ai Pin hadn’t changed, but acknowledged there was a difference between testing a device and actually using it.
“You don’t know everything before you start,” Ms. Bongiorno said. Given the product reviews, Mr. Chaudhri said, “they certainly wish we could resolve some of these things a little bit differently.”
HP did not respond to requests for comment.
This Humane account is based on interviews with 23 current and former employees, consultants and investors, who asked to remain anonymous because they were not authorized to speak publicly on the matter or feared retaliation. Bloomberg reported earlier on the possible sale of the start-up.
Many current and former employees said that Mr. Chaudhri and Ms. Bongiorno preferred positivity to criticism, leading them to ignore warnings about 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 in frustration.
Mr. Chaudhri said his company, which had 250 employees at its peak, encouraged employees to offer feedback. The departures were a natural consequence of the shift from building a new device to maintaining it after launch, which he said is aimed at “a different type of person.”
Mr. Chaudhri and Ms. Bongiorno, who both worked at Apple, started Humane in 2019. They set out to create a lapel pin that attaches to clothes with a magnet. The device gives users access to an artificial intelligence-powered virtual assistant that can send messages, search the web or take photos. It’s complemented by a laser that projects text into the palm of the user’s hand for tasks like skipping a song while playing music. It also has a camera, speaker and cell phone service.
From the beginning, current and former employees said, Ai Pin had problems, which reviewers later singled out.
One was the device’s laser display, which consumed enormous power and would cause the terminal to overheat. Before showing the gadget to potential partners and investors, Humane executives often chilled it in ice packs to make it last longer, three people familiar with the demonstrations said. These workers said such measures could be common early in a product development cycle.
When workers raised concerns about the heat, they said, Humane’s founders responded that software improvements that reduce energy use would fix that. Mr. Chaudhri, who led the design, wanted to keep the sleek design of the gadget, three people said.
The battery of the device was not big enough to last long. The test units ran out of power within hours, current and former employees said. Humane decided to provide customers with a spare battery and charging case, which raised the price of the product by more than $100, two employees said.
The problems contributed to Humane pushing back the device’s April shipment date from October, employees said.
Some employees tried to talk the founders out of launching Ai Pin because it wasn’t ready, three people said. Others have repeatedly asked them to hire a chief marketing officer. The role remained vacant prior to the product launch.
In October, Time magazine named the Ai Pin one of the best inventions of 2023. The following month, Humane revealed the details of the product, promoting it in advertisements.
But orders have been slower than expected, three of the people said, prompting Humane to scale back plans to produce more of the 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 let go after questioning whether Ai Pin would be ready by April. At a company meeting after the firing, Mr. Chaudhri said the employee had violated policy by speaking negatively about Humane, two people present said.
Ms Bongiorno said the company could not comment on individual employees.
The founders said they had spoken with several reviewers as they evaluated the device and answered questions about their experiences, which included concerns about Ai Pin’s temperature and inaccurate responses to some requests.
On April 11, reviews in The New York Times, The Wall Street Journal, and The Verge blasted Ai Pin’s weaknesses. Marques Brownlee, a YouTube tech critic with 19 million subscribers, titled his review “Worst product I’ve ever reviewed…so far.”
After the reviews, Ms. Bongiorno said, “we got the team together and said, ‘OK, look, this is going to be painful. We should lean into painful comments.”
Ms Bongiorno and Mr Chaudhri said Humane had since worked on the device issues. 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 newest chatbot system, GPT-4o, and one that is set to improve battery life by 25 percent and reduce the device’s response time to two seconds.
These updates have addressed the questions raised by the reviewers, the founders said. Ms. Bongiorno referred to the reviews and comments as “a gift given to us.”
Businesses are interested in the device, he added. Within 48 hours of its launch, more than 1,000 companies — including retail, medical and education — got in touch to discuss possible collaboration or building software for the pin, Ms. Bongiorno said.
Humane also signed wireless carrier agreements to expand Ai Pin to South Korea and Japan.
Some discussions, including with HP, turned into talks about a possible sale as well as licensing of Humane’s technology, three people with knowledge of the situation said. The talks led Mr. Chaudhri and Ms. Bongiorno to hire Tidal Partners, an investment bank that had advised Cisco on its recent $28 billion acquisition of cybersecurity business Splunk.
Those conversations continued as Humane dealt with its discovery that a battery supplier had provided components that could pose a fire hazard. On Wednesday, it asked customers to stop using their charging case accessory while it tried to find a new supplier.
Humane had enough money to launch its device, people close to the company said, but was trying to raise more.
“We just want to build,” Ms. Bongiorno said.
Mr Chaudhri added: “We need to look at how we fund it best.”
