Veteran Dealmaker John Chambers to Join Board of Embattled AI Startup Humane
The Takeaway
Humane, a maker of a wearable AI device, has appointed ex-Cisco CEO Chambers to its board after holding discussions about a sale.
Humane, the maker of a wearable device that aimed to replace smartphones, has told investors that former Cisco CEO John Chambers is joining its board of directors, according to two people with knowledge of the decision. The move came after the six-year-old San Francisco startup recently considered a sale after reviewers panned the device, and it has been in talks to raise debt from its current investors that would later turn into equity.
Chambers has considerable experience with acquisitions from his time at the data center networking giant. Humane’s device, which went on sale earlier this year, is outfitted with a forward-facing camera, speaker and laser that can project text onto users’ palms, uses artificial intelligence to send messages, take photos and answer questions about the wearer’s surroundings.
Aside from Humane’s novel device and accompanying patents, its team of ex-designers and engineers from Apple, Tesla and Nvidia could be appealing to potential acquirers that want to work on AI-powered devices.
The company has closed a portion of an additional round of financing from existing investors and is still in fundraising talks, according to one of the people with knowledge on the financing.
OpenAI CEO Sam Altman, Meta CEO Mark Zuckerberg and other leaders have been pursuing wearable AI devices, including glasses and earbuds with forward-facing cameras and speakers. The leaders aim to use the same technology behind chatbots like ChatGPT to act as an on-the-go assistant for wearers of the devices.
Chambers struck 180 deals during his 20-year tenure as Cisco’s CEO and now runs a venture firm called JC2 Ventures, which has backed Rubrik and OpenGov. The New York Times previously reported that Humane talked to potential acquirers such as HP about a deal.
Chambers declined to comment. HP didn’t immediately respond to request for comments.
A sale would mark a disappointing conclusion for Humane, which was founded by two ex-Apple employees with ambitions to harness AI for “ambient computing” that allows users to engage with technology without interacting with smartphone or computer screens. It raised more than $240 million from investors including Microsoft, Tiger Global Management, OpenAI’s Sam Altman and Marc Benioff’s Time Ventures, fetching a valuation of $850 million at its Series C in March 2023.
Its founders’ pedigree, combined with enthusiasm for the device’s prospects, laid the groundwork for a glitzy launch. Humane co-founder Imran Chaudri demonstrated the pin on a TED Talks stage in April 2023 and the startup got some models to wear it at Paris Fashion Week in September.
But early reviewers of the device, which starts at $699 plus a $24 monthly subscription for a phone number, cellular data and cloud storage, were harsh. YouTuber Marques Brownlee called it the “worst product” he’s ever reviewed. And customers complained they had a hard time canceling orders.
The rough start called into question its future, particularly as the founders of AI startups such as Inflection and Adept left their companies to work for tech giants Microsoft and Amazon, respectively.
Beyond the steep cost of computing that dog all AI startups, the cluster of companies making AI devices, such as Rabbit, also face particular difficulties: Large language models like those developed by OpenAI and Anthropic are usually too large to run on-device, meaning that these AI devices still require an internet connection and can be extremely slow.
Earlier this year, Humane laid off 10 employees and its CTO Patrick Gates stepped down from the C-suite role, changes that co-founder and CEO Bethany Bongiorno said would prepare Humane for its “next phase of growth.”