Shocking AI Acquisition: HP’s Humane Deal Sparks Raises and Ruthless Layoffs

Silicon Valley witnessed another dramatic turn in the ever-evolving AI acquisition landscape this week. Humane, once a celebrated AI hardware startup known for its ambitious AI Pin, has been partially acquired by tech giant HP for a mere $116 million – a stark contrast to the $240 million it raised in venture capital. While investors might be reeling from this diminished return, the real human drama unfolded within Humane’s 200-strong workforce. Bitcoin World brings you an exclusive inside look at the chaotic day of the acquisition, revealing a tale of contrasting fortunes: significant HP raises for some and brutal Humane layoffs for others.

The Thrill of Victory: Big Raises for Key AI Talent

For a select group of Humane employees, Tuesday was a day of unexpected celebration. Just hours after the acquisition announcement, internal documents reveal that several employees received enticing job offers from HP. These weren’t just lateral moves; we’re talking substantial HP raises, exceeding 30% in some cases, coupled with HP stock options and bonus plans. Sources indicate that these coveted offers primarily targeted individuals crucial to Humane’s core software development – the very engineers HP is eager to integrate into its new AI initiatives.

The Agony of Defeat: Immediate Humane Layoffs

However, the acquisition announcement wasn’t celebratory for everyone at Humane. A significant portion of the workforce, particularly those focused on the physical AI Pin device – including teams in quality assurance, automation, and hardware – faced a starkly different reality. Tuesday night brought the devastating news of immediate Humane layoffs. These employees, instrumental in bringing the AI Pin to life, found themselves abruptly out of a job as HP’s focus narrowed to software expertise. The swiftness and selectivity of these actions underscore HP’s strategic aim: to bolster its AI capabilities by absorbing Humane’s software engineering talent while discarding the struggling hardware venture.

Why the Selective Acquisition? HP’s AI Ambitions in Silicon Valley

This acquisition strategy speaks volumes about the current tech landscape, especially in Silicon Valley. Skilled AI engineers are gold dust, and HP, like other legacy tech giants, is scrambling to secure this precious resource. While Humane wasn’t building foundational AI models from scratch like OpenAI or Google, their team possessed valuable expertise in applying AI to consumer products. This expertise is precisely what HP is after as it aims to inject AI into its existing product lines – PCs, printers, and conference room technologies – under the newly formed HP IQ unit, led by Humane’s co-founders.

Inside the Acquisition Day: Impromptu Meetings and System Lockouts

While rumors of a potential sale had been circulating, the actual acquisition day was anything but smooth for Humane employees. Let’s break down the timeline:

• Rumors and Hints: Whispers of a sale to HP had emerged, and leadership hinted at “big news” in late January.
• Sudden Announcement: The news finally broke in late February, with little advance warning to employees.
• Impromptu Meeting: A company-wide Google Meet invite landed in employee inboxes just hours before the official press release.
• Dual Meetings, Dual Fates: CEO Bethany Bongiorno announced the acquisition in a company-wide meeting, followed by another meeting clarifying who would receive HP offers and who would not.
• Immediate Layoffs: Layoff notifications were swiftly delivered via email, accompanied by immediate system access shutdowns.

The abrupt nature of these events left many employees reeling, highlighting the often-unpredictable nature of startup acquisitions.

The AI Pin’s Tumultuous Journey: From Buzz to Bust

Humane’s AI Pin, once heralded as a revolutionary device, faced a series of unfortunate setbacks that ultimately paved the way for this acquisition. Here’s a quick recap of the AI Pin’s troubled trajectory:

• Negative Reviews: Early testers delivered scathing reviews, dampening employee morale.
• Fire Hazard: The charging case was briefly flagged as a potential fire risk.
• Executive Exodus: The Head of Product Engineering and other executives jumped ship to start their own venture.
• Sales Slump: Returns outpaced sales, forcing a price drop from $699 to $499.
• Planned Obsolescence: Post-acquisition, Humane advised customers to “recycle” their AI Pins, announcing they would largely cease functioning within weeks.

Despite these challenges, some within Humane view the acquisition as a partial victory. In the volatile startup world, securing an acquisition, even at a reduced valuation, is often seen as a better outcome than complete failure. And for those software engineers now heading to HP with significant HP raises, there’s a chance to continue their AI work on a larger stage.

The Broader AI Wearables Landscape: A Sign of the Times?

The demise of the AI Pin arrives at an interesting juncture in the AI wearables market. While the Pin faltered in its ambition to replace the smartphone, other AI wearables are gaining traction. Meta’s Ray-Ban smart glasses are reportedly selling well, with new iterations on the horizon. Rabbit’s R1 device is now available in Best Buy, reaching a broader consumer base. And Friend, another AI wearable startup focused on addressing loneliness, is still anticipated. Ironically, Apple’s latest budget-friendly iPhone boasts enhanced AI features, mirroring functionalities touted by devices like the AI Pin that aimed to supplant smartphones. Was the AI Pin simply too early to the party? Or does its failure signal deeper challenges for standalone AI hardware in a world increasingly dominated by smartphone-integrated AI?

To learn more about the latest AI market trends, explore our article on key developments shaping AI features.