Humane, formerly one of Silicon Valley’s buzziest AI hardware startups, announced on Tuesday it was being partially acquired by HP for $116 million, less than half of the $240 million the startup raised in venture capital funding.
Tuesday may not have been a great day for some Humane investors, but it was especially chaotic for its roughly 200 employees, according to internal documents seen by TechCrunch and two sources who requested anonymity to discuss private matters.
Hours after the acquisition was announced, several Humane employees received job offers with pay increases of well over 30%, plus HP stock and a bonus plan, the sources revealed. Multiple employees who received offers worked on the company’s core software, though sources also indicated that not all of the people who worked on software got job offers.
Meanwhile, other Humane employees – especially those who worked closer to the AI Pin devices, including in quality assurance, automation, and hardware – were notified they were out of a job on Tuesday night, the sources said.
These job offers highlight HP’s interest in obtaining Humane’s pool of AI-focused software engineers as part of the acquisition. Engineers that can build around AI systems are some of the hottest commodities in Silicon Valley today. While Humane’s team wasn’t training AI foundation models from scratch – such as engineers at OpenAI, Google, and other AI labs – such employees are still highly sought after. This makes it difficult even for giant legacy players, such as HP, to hire.
The companies announced on Tuesday that HP IQ will not only be home to Humane’s cofounders, Imran Chaudhri and CEO Bethany Bongiorno, but also the startup’s AI operating system, CosmOS. The new unit will focus on integrating artificial intelligence into HP’s personal computers, printers, and connected conference rooms.
One source said that these job offers, with their higher salaries, were exciting for many who were offered them.
Impromptu, company-wide meetings
HP’s acquisition wasn’t exactly a surprise to Humane employees. The New York Times reported in June that Humane wanted to sell itself to HP for more than $1 billion, though the final price ended up being far less.
Humane’s leadership also told some employees to prepare for “big news” to come in late January, one person said.
But the news didn’t come until the second half of February. When it did, Humane’s employees weren’t given much of a heads up that a final agreement had been struck, or that the AI Pin business would be wound down.
Around noon pacific on Tuesday, Humane’s chief of staff, Andie Adragna, sent employees a Google Meet invite to an impromptu, company-wide meeting to occur in just a couple hours, according to internal correspondence seen by TechCrunch. The meeting took place at the company’s San Francisco office and was livestreamed for remote employees.
At the meeting, Bongiorno told employees about the acquisition offer just moments before Humane and HP’s press release went live, a source described.
During another company-wide meeting later that day, Bongiorno clarified that some employees would get job offers to work at HP IQ, and others would not.
Multiple Humane employees were then laid off via email on Tuesday, and had their access to company systems cut off immediately, another source said.
The total number of Humane employees affected by the layoffs is unclear. HP and Humane did not respond to TechCrunch’s request for comment.
An early, troubled AI hardware startup
Humane’s business showed signs of floundering for a while.
The AI Pin was immediately met with negative reviews from early testers – a morale killer for the company’s employees. Later, the product’s charging case was briefly deemed a fire hazard. To make matters worse, the company’s Head of Product Engineering abandoned the startup in July to start his own company with some other Humane execs.
Then things got really bad. Returns for the AI Pin outpaced its sales at one point, which may have prompted the company to drop the price of its AI Pins from $699 to $499.
After the acquisition was announced, Humane told customers they should “recycle” their $499 AI Pins, which the startup says will mostly stop working in less than two weeks.
That said, some employees view Humane as a moderate success story for a startup.
Most startups do not sell thousands of devices, gain national attention, and get acquired for millions. Startup employees join these companies understanding the risk that their company will likely fail, but try anyways. In Humane’s case, at least some portion of the staff is being offered a well-paying job at HP, and will get to continue some projects they started at Humane.
Interestingly, the AI Pin, with its mission to replace a smartphone, has died right as other AI wearables seem to be picking up steam.
Meta’s Ray Ban AI smart glasses continue to sell well, and the company is reportedly readying new versions for release later this year. Rabbit’s R1 landed in Best Buy stores this week, opening the door to more mainstream electronics consumers. And we’re still awaiting the release of Friend, another AI startup creating a wearable device to address loneliness.
Perhaps most ironically, Apple released a $599 version of iPhone this week that’s packed with AI features, mimicking features of the devices that hoped to replace phones.
The AI Pin was almost definitely ahead of its time – the question now is, how early?
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