How Humane’s Ambitious A.I. Device Failed to Meet Expectations

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Humane’s Ai Pin was supposed to free people from smartphones, but sales have been slow. Now Humane is talking to HP and others about a potential sale.

Days before gadget reviewers weighed in on the Humane Ai Pin, a futuristic wearable device powered by artificial intelligence, the founders of the company gathered their employees and encouraged them to brace themselves. The reviews might be disappointing, they warned.

Humane’s 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’ve ever reviewed.”

About a week after the reviews came out, Humane started talking to HP, the computer and printer company, about selling itself for more than $1 billion, three people with knowledge of the conversations said. Other potential buyers have emerged, though talks have been casual and no formal sales process has begun.

Humane retained Tidal Partners, an investment bank, to help navigate the discussions while also managing a new funding round that would value it at $1.1 billion, three people with knowledge of the plans said.

The developments amount to a face-plant by Humane, which had positioned itself as a top contender among a wave of A.I. hardware makers. The San Francisco company had raised $240 million from powerful Silicon Valley investors, including Sam Altman, OpenAI’s chief executive, and Marc Benioff, Salesforce’s chief executive, who valued the start-up at $1 billion based on its enormous ambition and promise. Humane spent five years building a device to disrupt the smartphone — only to flounder.

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