Wearable AI Startup Humane is Seeking a New Buyer

The AI Pin, launched last month to mixed reviews, has prompted Humane to seek acquisition, according to sources cited by Bloomberg.

The company is valued between $750 million and $1 billion, with the sale process still in its early stages.

Founded in 2017 by former Apple executives Bethany Bongiorno and Imran Chaudhri, Humane has attracted significant attention and investment. Despite never disclosing an official valuation during its funding rounds, The Information reported last year that Humane’s valuation stood at $850 million. To date, Humane has raised approximately $230 million from prominent backers including Microsoft, Qualcomm Ventures, Marc Benioff, and OpenAI’s Sam Altman, all before any product was revealed to the public.

Humane finally unveiled its flagship product, the AI Pin, last June. The AI Pin is a wearable device featuring a projected display and AI-powered functionalities. Its unique form factor includes various sensors, generative AI capabilities, and a small projector capable of beaming a display onto any surface, such as the user's hand. The launch initiated a pre-order phase in the U.S., but faced delays before officially releasing in mid-April.

Despite the anticipation, the AI Pin struggled to find a solid market footing. Priced at $700, with an additional $24 monthly subscription for a phone number and unlimited data, the device was a tough sell in a financially cautious consumer market. Critics argued that the AI Pin offered little beyond the capabilities of existing smartphones, making it seem like a solution in search of a problem.

Prominent YouTuber and tech reviewer Marques Brownlee, known as MKBHD, delivered a particularly harsh review of the AI Pin. Brownlee's negative assessment was influential, with many suggesting it could derail the product's success before it gained momentum. Common complaints included poor battery life, overheating issues, and the perception that the AI Pin did not offer significant advantages over cheaper alternatives, such as Meta’s Ray-Bans and Rabbit’s R1 smart gadgets.

The challenges at Humane were further compounded by internal turmoil. In January, the company’s Chief Technology Officer (CTO), Patrick Gates, departed after joining Humane in 2019 following a 13-year tenure at Apple. His departure, alongside 4% of the workforce, signaled deeper issues within the company.

Given these challenges, the news that Humane might be seeking a buyer is not entirely surprising. The AI Pin's lukewarm reception and the company’s internal struggles have raised questions about its viability in the competitive wearable tech market. The question remains whether any potential suitors are willing to invest in Humane at this critical juncture.

The AI Pin’s ambitious design and innovative features were meant to set it apart in the burgeoning field of wearable technology. However, the high price point and limited functionality compared to existing smartphones have hindered its adoption. This situation underscores the difficulties faced by startups in introducing groundbreaking yet practical products that resonate with consumers.

The wearable technology market is highly competitive, with major players like Apple, Samsung, and Google continually pushing the envelope with advanced smartwatches and other devices. For a newcomer like Humane, establishing a foothold required not just innovation but also compelling use cases and competitive pricing. Unfortunately, the AI Pin appears to have fallen short in these critical areas.

As Humane navigates the possibility of an acquisition, potential buyers will likely scrutinize the company's assets, including its intellectual property, team, and technological innovations. The valuation range of $750 million to $1 billion suggests that Humane still holds substantial value, primarily due to its pioneering work in AI and wearable technology.

Despite the current challenges, Humane's journey offers valuable lessons for tech startups. The importance of aligning product capabilities with consumer needs and market readiness cannot be overstated. Additionally, maintaining internal stability and leadership continuity is crucial for navigating the complex landscape of technology innovation.

As the sale process unfolds, the future of Humane and the AI Pin remains uncertain. Whether the company finds a buyer willing to invest in its vision or needs to pivot its strategy, this moment is a pivotal point in its trajectory. The wearable tech industry will undoubtedly be watching closely to see how Humane's story develops.

In conclusion, Humane’s pursuit of a buyer reflects the broader dynamics of the tech industry, where innovation must be balanced with practicality and market demand. The AI Pin’s journey highlights the challenges of introducing new technology in a competitive market, and the potential acquisition marks a significant chapter in Humane's ongoing evolution.