Hello and welcome to Eye on AI. In today’s edition…AI hardware startup Humane shuts down; Trump's government cuts come for the AI Safety Institute; Google launches an AI assistant for scientific research; Microsoft unveils a model for generating video games; and Crunchbase reconfigures itself as an AI prediction-engine.
Just nine months after shipping its AI Pin wearable gadget, Humane is shutting down.
The AI startup announced yesterday that it struck a deal with HP to acquire its assets for $166 million. The Humane team will join HP to form HP IQ, the firm’s new AI innovation lab focused on building an intelligent ecosystem across HP’s products. It’s probably the best possible outcome for Humane and its investors who poured over $240 million into the short-lived company (including Microsoft, Open AI CEO Sam Altman, Salesforce CEO Marc Benioff, and others), since the writing has long been on the wall.
For customers who shelled out for the pricey gadget, however, it’s somewhat of a loss. In addition to taking the AI Pin off the market, the company closing shop means already-purchased devices will cease to work at the end of the month. The company is urging customers to download any photos, videos, and notes off their devices before they’re permanently deleted on Feb. 28. But the truth is—basically no one was enjoying the AI Pin anyway.
Humane was trying something new, and it deserves credit for that. But the whole saga is a lesson about the risks of shipping products that are not ready and do not deliver on their promise, as has emerged as a trend in the fast-paced AI era.
The downfall
From the moment it was demonstrated in a stark announcement video, the AI Pin—pitched as a screen-less, app-less wearable device for interacting with large language models—garnered intense skepticism. Reception only worsened when reviewers got their hands on the product, with many reporting that it simply did not work. Notable tech YouTuber Marques Brownlee famously called it “the worst product I’ve ever reviewed.”
The public didn’t receive the product any better. In the months after launch, daily returns of AI Pins were outpacing sales, The Verge reported. In October, five months after the product shipped, the company slashed its price in an attempt to drive sales, charging $499 (for a version that didn’t include the original accessories) down from $699. Of course, users would still have to pay the $24 subscription fee every month. Not only did the Pin not work well, but it wasn’t cheap.
The impacts of the AI ‘race’
While there will always be a learning curve with first generation products and risks associated with paying a high price to be an early adopter, there is some level of expectation that a product being sold will generally do what it’s supposed to do. As already discussed, the AI Pin did not even come close.
“The AI Pin is an interesting idea that is so thoroughly unfinished and so totally broken in so many unacceptable ways that I can’t think of anyone to whom I’d recommend spending the $699 for the device and the $24 monthly subscription,” wrote The Verge’s David Pierce after spending two weeks testing the device.
Users reported that the AI Pin often failed to complete tasks and answer queries, or took forever to complete them when it did. They also reported issues with the accuracy of the information provided by the AI Pin, its interface, the resolution of the projector, battery life, and pretty much every aspect of the device. At one point, the company even warned owners not to use the charging case after discovering it may pose a fire safety risk.
It’s fair to wonder: Why didn’t Humane continue to work on the product until it performed much better?
While the company was founded in 2018 and has been working on the product for years, the launch of ChatGPT in November 2022 turned the previously experimental and research-driven field of AI into a fast-paced commercial “race.” Now, progress in model capabilities isn’t happening over the course of years or even months, but rather weeks, and launches are happening nearly every day. Humane was taking its time for a while, but time ran out.
In addition to the pressure to launch quickly and beat the competition in the post-ChatGPT AI era, the costs associated with AI R&D only exacerbate the issue. Developing and running AI products is very expensive, putting startups in particular in tight situations and timelines.
During a recent conversation about how Rabbit, the company making a similar LLM-in-a-box device, also launched an unfinished product and has been essentially building the device in public, CEO Jesse Lyu told me the company simply doesn’t have the the runway or resources of a tech giant that would enable it to take more time. “We have to make sure that we take our shot and move fast. This is the only way that we can stay in competition,” he said.
There’s also just the fact that the underlying AI technology is still very much being developed, and all AI models (Humane used an ensemble of AI including ChatGPT and Gemini) are plagued by mistakes and hallucinations. Humane was the first consumer hardware launch of the AI era, and well, maybe there is a reason there hasn’t been too much interest in spinning LLMs into gadgets just yet.
And with that, here’s more AI news.
Sage Lazzaro
sage.lazzaro@consultant.fortune.com
sagelazzaro.com
