Humane, once hailed as one of the most exciting AI hardware startups in Silicon Valley, revealed on Tuesday that HP would partially acquire the company for $116 million. This amount is significantly lower than the $240 million the startup garnered through venture capital.
While Tuesday may not have marked a high point for some investors in Humane, it was particularly tumultuous for its approximately 200 employees, as outlined in internal documents accessed by TechCrunch and corroborated by two anonymous sources.
Shortly after the acquisition news broke, many Humane employees were extended job offers that included salary increases exceeding 30%, along with HP stock options and a bonus program. Sources noted that several of the individuals who received offers contributed to the company’s central software, although not every team member in software development was included in these offers.
Conversely, other employees, especially those involved with the AI Pin devices—encompassing roles in quality assurance, automation, and hardware—learned on Tuesday night that they were being laid off, according to the same sources.
These job offers underscore HP’s keen interest in Humane’s cadre of AI-focused software engineers as part of the acquisition strategy. Professionals adept at developing AI systems are among the most sought-after assets in the Silicon Valley landscape today. Even though Humane’s team wasn’t engaged in establishing foundational AI models like their counterparts at OpenAI or Google, these employees remain in high demand, complicating hiring efforts even for established giants like HP.
On Tuesday, both companies announced that HP IQ will house not only Humane’s founders, Imran Chaudhri and CEO Bethany Bongiorno, but also the startup’s AI operating system, CosmOS. This new division will concentrate on integrating AI into HP’s personal computing devices, printers, and connected meeting rooms.
One source mentioned that these job offers, particularly with their enhanced pay, brought excitement to many of the recipients.
Unscheduled company-wide meetings
The acquisition by HP came as no surprise to Humane staff members. The New York Times reported back in June that Humane sought to sell itself to HP for a figure exceeding $1 billion, yet the eventual acquisition price was notably lower.
Leadership at Humane also informed select staff to brace for “big news” slated for late January, as relayed by one employee. However, the announcement didn’t arrive until the latter half of February. When it did come, many employees were caught off guard, as there was little early indication that a deal had been finalized or that the AI Pin venture would be winding down.
On Tuesday around midday Pacific Time, Humane’s chief of staff, Andie Adragna, distributed a Google Meet invitation for a last-minute, company-wide meeting scheduled to take place just a couple of hours later, according to internal communications reviewed by TechCrunch. The meeting was held at the company’s San Francisco office and streamed live for remote staff.
During this meeting, Bongiorno informed employees about the acquisition and the corresponding press release went public shortly after.
In a subsequent company meeting later that day, Bongiorno clarified that while some employees would receive job offers from HP IQ, others would not be so fortunate.
Many employees received layoff notifications via email on Tuesday and had their access to company systems revoked immediately, stated another source.
The precise number of Humane employees impacted by the layoffs remains unclear. Both HP and Humane did not respond to TechCrunch’s inquiry for comments.
A nascent yet troubled AI hardware startup
Humane’s operations had shown signs of distress for a considerable period.
The AI Pin quickly faced harsh criticism from early users, negatively impacting employee morale. Subsequently, its charging case was temporarily classified as a fire hazard. Adding to the turmoil, the Head of Product Engineering exited the startup in July to launch his own venture alongside several other Humane executives.
Then the situation escalated. Reports indicated that returns of the AI Pin surpassed actual sales at one stage, likely prompting the company to lower its pricing from $699 to $499.
Following the acquisition announcement, Humane instructed customers to “recycle” their $499 AI Pins, claiming that many of these devices would cease functioning in under two weeks.
Despite these developments, some employees perceive Humane as a moderate success story within the startup ecosystem.
Most startups struggle to sell thousands of units, grip national attention, and achieve multimillion-dollar acquisitions. Employees join such companies knowing the inherent risks, yet they proceed with hope. In Humane’s instance, at least a segment of the workforce is being offered lucrative positions at HP, enabling them to continue working on projects initiated at Humane.
Ironically, even as the AI Pin, which aimed to replace smartphones, falters, other AI wearables appear to be gaining traction.
Meta’s Ray-Ban AI smart glasses are reportedly performing well in sales, with the company poised to release updated models later this year. Meanwhile, Rabbit’s R1 has made its debut in Best Buy stores this week, appealing to a broader base of consumers. Anticipation is also building for Friend, another AI startup set to launch a wearable aimed at combating loneliness.
Most ironically, Apple recently debuted a $599 iPhone incorporating AI features reminiscent of those in devices that sought to replace phones.
The AI Pin clearly arrived ahead of its time, but the lingering question remains: just how premature was it?
Compiled by Techarena.au.
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