Are AI gadgets doomed now that Humane is reportedly looking for a buyer?

Regardless of what you think about AI gadgets and their usefulness, there’s no doubt that products like the Humane Ai Pin and Rabbit R1 have reignited interest in new hardware.

Reviews of both standalone AI gadgets are, to put it mildly, very negative. To make matters worse, both Humane and Rabbit found themselves mired in their own startup woes. Nearly two months after the Ai Pin was panned by multiple tech reviewers last week Bloomberg It was reported that Humane was looking for a potential buyer. The tech startup, co-founded by former Apple veterans Imran Chaudhri and Bethany Bongiorno, is reportedly seeking between $750 and $1 billion, although it’s possible it won’t find a buyer or will have to settle for a lower amount. Rabbit faced backlash over founder Jesse Lyu’s previous involvement in the NFT project, which is coming back to haunt him.

What was supposed to be a breakout year for AI hardware has proven frustrating so far, with skeptics suggesting the entire product category could be a fad. And who could blame anyone for thinking this way when artificial intelligence and chatbots are on a collision course with smartphones? Who needs a standalone AI gadget when AI will be integrated directly into iOS and Android? But are AI gadgets doomed and will inevitably be absorbed into AI-equipped iPhones, Samsung Galaxy phones and Google Pixels?

AI will never be finished

Let’s address the main argument of critics: AI gadgets will never be finished. AI devices like the Ai Pin and R1 have an agile architecture that can be updated remotely and more frequently than the typical annual iOS or Android software update, which usually introduces a number of new features that are worth waiting for. Both Humane and Rabbit already take advantage of this, providing frequent updates that improve latency, accuracy and intelligence.

For example, I tested the latest (beta) CosmOS 1.1.4 software version for the Ai Pin, and it virtually eliminated thermal stalls, reduced latency by about 30 percent, and increased battery life by three hours. Another recent backend update changed the default AI model to GPT-4o, hours after OpenAI revealed it, and suddenly Ai Pin became 50 percent smarter.

My point is that even if an AI gadget is launched sloppily, if the AI ​​model is changed and optimizations are made quickly, it can be a completely different (and hopefully more competent) product literally overnight. Since most on-device AI processing takes place almost entirely in the cloud, you don’t have to wait for upgraded hardware—perhaps with an improved processor, neural processor, or more RAM—to “fix” what’s left unfinished.

Niche gear is fine

Long before Ai Pin shipped, Humane made a fatal mistake: Chaudhri said that “the smartphone is dead,” suggesting that Ai Pin would replace the glowing glass tiles in our pockets.

With this lens, it’s not surprising that most people miss the Ai Pin’s value proposition. The wearable device requires a separate phone number for calling and texting; it doesn’t work with iMessage because its CosmOS software runs on Android. A separate $24/month subscription is required for Ai Pin to work at all. Oh, and you have to pay for Tidal (if you’re not already a subscriber) to listen to music, as it doesn’t support Spotify, Apple Music, or any other music streaming service.

As a phone replacement, the Ai Pin is inadequate – definitely not sufficient. There aren’t many apps that people want or need; there is no e-mail; you can’t use it to buy things. Humane says some of these features will come in future software updates, but in its current state, Ai Pin simply won’t be enough to make most people ditch the black rectangles.

In contrast, Rabbit’s Lyu has been vocal from the beginning that the R1 won’t replace phones; the device is more of a companion. This makes it not as feature-rich as the Ai Pin, but also much cheaper ($200 vs. $700).

But why does an AI gadget have to replace the phone or go bankrupt? I see potential in them as an alternative device for niche applications if companies provide updates quickly. AI gadgets are great for people tired of doom scrolling. Apple or Android won’t solve the “attention saving” problem that both Ai Pin and R1 are trying to “fix” because phone platforms’ business models are based on time spent in apps (usually watching ads). But just buy a stupid phone (aka flip phone), you say? I’m sorry, I don’t care what New Yorker claims that no one actually resorts to stupid phone calls. Dumb phones look outdated; many of them have addictive social media apps that you are trying to escape from (Instagram, Facebook, WhatsApp, etc.); they have no artificial intelligence. Maybe the idea is to not have AI, but having AI, but in a form other than the phone, is probably more progressive than going back to an old product idea.

Ai Pin may have arrived too soon, before AI is ready to make the company’s ambient technology dreams come true.

I’m not a market researcher, so it’s possible (and very likely) that the number of people asking for a wearable device like the Ai Pin or a watered-down phone like the R1 isn’t very large. But it’s also an opportunity to focus the AI ​​gadget on niche users. Instead of creating a mainstream device that most people will not bow to, simply create a niche device that meets specific users and their needs. Not every new device has to be for everyone.

Before his retirement, veteran consumer technology journalist Walt Mossberg had a vision of a future in which technology (read: computers) “disappeared” and became “ambient.” Instead of a single device at the center of our lives We that we would have to work with all day, artificial intelligence, unlocked through microphones, cameras and other technological means, would enable computers to act on our behalf. Think of it as the next level of automated Alexa or Google Assistant skill, where computers understand what you need exactly when you need it. That’s what Humane is trying to do. Ai Pin may have arrived too soon, before the AI ​​is ready to make the company’s ambient technology dreams come true.

AI hardware requires a lot of resources

Humane has not commented on the situation Bloomberg report. But if the report is true, the sale itself doesn’t necessarily mean the end of the company or Ai Pin.

Perhaps Humane, Rabbit, Limitless, Tap, Tone, Friend, and countless other hardware startups are doomed to fail because the AI ​​integrated directly into phones eats their lunch. Or maybe Humane selling itself could mean access to more resources. Oculus is a perfect example of this. The VR company burst onto the scene as a successful Kickstarter… and then sold to Meta (then called Facebook) for $1.6 billion. You could argue that Oculus has lost its way (and most of its original talent), but you can also look at this deal as a big win. The small VR startup gained access to near-infinite resources, allowing it to quickly iterate on the headset and secure key software developers like Beat Games (Defeat Saber), Sanzaru Games (Asgard’s Wrath and its sequel), Ready at Dawn (A lonely echo) and BigBoxVR (Population: One). We might not have gotten Quest 3 as quickly as we did if Oculus had done it themselves.

Back to the original question: Are AI gadgets doomed? I wish I could give you a simple answer: yes or no. The truth is that we simply don’t know. We are still at the beginning of the whole artificial intelligence “revolution”. AI hardware is still the Wild West, and until we see whether AI integrated into phones actually moves the needle, anything is possible. But ask me again later this year and my answer may be different.