The AI Daily Brief: Artificial Intelligence News and Analysis - After Rough Launch, is Humane AI Pin Looking to Sell?

Starting point is 00:00:00 Today on the AI Daily Brief, reports are that after a challenging product launch, Humane may be looking for a buyer. Before that in the headlines, multiple nine and even ten figure venture rounds in AI this week. The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI. To join the conversation, click the Discord link in our show notes. Welcome back to the AI Daily Brief headline edition, all the AI headlines you need in around five minutes. Yesterday we got some serious fundraising news across a number of different companies and categories within AI, and one of the standouts to me was the news that Suno, the AI music generating company,

Starting point is 00:00:41 had raised $125 million. A couple interesting things from this announcement. First of all is the usage. Suno writes, we released our first product eight months ago, enabling anyone to make a song with just a simple idea. It's very early days, but 10 million people have already made music using Suno. They go on, we've seen producers crate digging, friends exchanging memes, and streamers co-creating songs with stadium-sized audiences. We helped an artist who lost his voice

Starting point is 00:01:04 bring his lyrics back to life after decades on the sidelines. We've seen teachers ignite their students' imaginations by transforming lessons into lyrics. So what's interesting to me about this is that at a $500 million valuation, which is what I think Suno commanded with this fundraising round, the investors are betting that the market for AI generative music is very, very large. In other words, from a sheer economic standpoint, they can't be just expecting a billion dollar exit to some larger music company. It suggests to me that instead, they believe that the ability to create music this easily will actually radically expand the market for who creates music. Perhaps there's also a vision for audio generation beyond music into the realm of sound, and perhaps there's

Starting point is 00:01:42 an enterprise play there, but none of that is the focus of their announcement, which is clearly around music itself. To get a sense of how this round compares to other music tech, it's the 11th biggest music tech funding round of all time, and the biggest since March of 2021. It's also the biggest round so far in the music and audio AI space, with 11 labs' recent $80 million raise the closest one. One of the investors in this round, Shane Mack writes, From the moment I used Suno, I was like, this is the future of music, so many unknowns, but it reminds me of the first time I use Spotify. Except in this world, the labels don't own everything. Proud to be an investor in something I believe in so much. I really look forward

Starting point is 00:02:17 to figuring out how AI can actually help musicians and writers a lot more than streaming ever did. So that is the take from one side of things. And by the way, I know that Shane is personally close with a number of different musicians. In other words, his opinion on this is not just formed from some capitalist bent. At the same time, there is tons of skepticism. A number of different creators asked questions about the training data, and Emily White, formerly of Spotify, writes, a lot of talk that Suno is the future of music, but most consumers want to interact with artists, not replace them. The market for AI-generated song creation will be smaller than the market for superfandum. Fun new monetization tools for artists and allow fans to modify and mix their songs,

Starting point is 00:02:52 not an unlicensed company that trains on copyrighted material to generate uncanny valley novelty songs with no revenue going back to rights holders. Suno and Udeo are fun, simple to use products. Inspiring creativity and lowering the barrier to creation are great, but let's not pretend AI-generated music is a bigger force than artist's power to create memories, experiences, self-identities, and cultural change through music. The point here is that this is no different than any other AI fundraising round right now, where there's going to be tons of excitement, some amount of skepticism,

Starting point is 00:03:19 and a big, wide, open future that no one quite knows how we'll shake out. Another big funding round was Scales Series F, a billion-dollar round at a $13.8 billion valuation. The company's blog post is Scales Series F, expanding the data foundry for AI. The company talks a lot in its blog post about the, quote, major problems in AI data that still remain. They write, the scaling laws imply an exponentially growing need for data as models get bigger, which raises a key question. Will we run out of data? Just as data compute and algorithms comprise the three pillars of AI,

Starting point is 00:03:48 we believe the future of AI data in turn rests on three principles. Data abundance, we must build. the data foundry that ushers in an era of AI-ready data abundance and not resign ourselves to data scarcity. Frontier data. As we develop progressively more powerful AI, we must build frontier data, which is always pushing the boundaries of AI capabilities towards complex reasoning, agents, multimodality, and more. Measurement and evaluation. We must build an evaluation system that enables measurement of AI to build confidence, drive adoption, and scale impact. Abundance is not the default. It's a choice. It requires bringing together the best

Starting point is 00:04:16 minds and engineering operations in AI. Our calling is to build the data foundry for AI, and with today's funding, we're moving into that next phase. of that journey. Over in France, we have another big, exciting early round for a French company, formerly known as holistic AI, now known as H, the company has raised $220 million, and it seems like the game here is AI agents. Said a partner at Excel, the H team's vision of creating a large action model to automate business tasks has the ability to be transformational across all industries. As Bloomberg points out, the newest French entrant is arriving in a crowded field. Several startups are working on AI agents. Some companies are already.

Starting point is 00:04:52 already using these agents to help with employee onboarding and managing supply chains. While courting investors, the founders of H highlighted their technical expertise in developing multi-agent AI, systems that interact and learn from their environment and each other. Given what we've seen from presentations from OpenAI, Google, and now Microsoft, it's obvious that there's going to be a lot of competition in this space. Speaking of which, one of the big things that was announced at Microsoft Build yesterday, was something they're calling Team Copilot. The announcement post reads,

Starting point is 00:05:19 Team Copilot expands co-pilot beyond a personal assistant to act. is a valuable team member, participating and contributing along with the team. And of course, you're always in control, assigning tasks or responsibilities to co-pilot so the whole team can be more productive, collaborative, and creative together. The roles that they give as examples include a meeting facilitator, a group collaborator, where, quote, copilot helps everyone get more out of chats, surfacing the most important information, tracking action items, and addressing on resolved issues, and team co-pilot as a project manager. One interesting little nugget, however, is that not everyone is sold on this agentic vision. One little coder on Twitter,

Starting point is 00:05:52 shared a post from LinkedIn from Scott Jensen, who writes, I just left Google last month. The AI projects I was working on were poorly motivated and driven by this mindless panic that as long as it had AI in it, it would be great. This myopia is not driven by a user need. It is a stone cold panic that they are getting left behind. The vision is that there will be a Tony Stark like Jarvis assistant in your phone that locks you into their ecosystem so hard that you'll never leave.

Starting point is 00:06:14 That vision is pure catnip. The fear is that they can't afford to let someone else get there first. The exact same thing happened 13 years ago with Google Plus. That was a similar hysterical reaction but to Facebook. By the way, Apple is no different. They too are trying to create this AI lock-in with Siri. When the employer eventually has no clothes, they'll be lapped by someone thinking bigger. I'm not a Luddite. There is some value to this new technology. It's just not well-motivated. This, I think, is a question that we will be exploring a lot more as all of these proto-agents and deeper assistants come to market. But for now, that is going to do it for the AI Daily Brief Headlines

Starting point is 00:06:45 edition. Speaking of assistance, if you are interested in the wearable side of this question, check out the main part of the episode, where Humane is reportedly looking for a sale. Before we get back to the show, I want to tell you a little bit about Notion. Now, you've probably heard about Notion, the AI-powered workspace tool where any team can turn ideas into action, but what you may not have had is some reference point for just how much people who use Notion use Notion. I'm recording this ad at 2.31 p.m. and have interacted with more than 20 different Notion documents. I used one for taking voice notes while I was on a walk this morning. Another for keeping my to-do list for the week. Another for sharing product priorities with my team. Another for

Starting point is 00:07:25 reviewing contracts with a different part of my team. Another for brainstorming copy for social posts with yet a different part of my team, which by the way used the new Notion AI tools to actually brainstorm those ideas and so on and so forth you get the idea. Notion combines your notes and documents into one space that's simple and beautifully designed with, as I mentioned, the power of AI built right inside. It's a place where any team can write, plan, organize, and rediscover the joy of play. And it's for everybody, whether you're a Fortune 500 company or a freelance designer, starting a new startup, or a student juggling classes and clubs. Try Notion for free when you go to Notion.com slash AI breakdown. That's all lowercase letters, notion.com slash AI breakdown,

Starting point is 00:08:03 and start turning ideas into action. When you use our link, you're supporting our show. Notion.com slash AI breakdown. Hello, friends. Before we get back to the episode, I want to tell you about something I'm doing on Super Intelligent this June. Super is, of course, our platform for AI learning, and I've heard from a lot of you that you really want something for a true AI beginner, someone who's really just getting their feet wet with these tools. So what I'm going to do is put together basically a course that sits on top of and uses Super Intelligent tutorials and lessons, but where I hand guide you through around 10 different lessons and how-toes,

Starting point is 00:08:36 that I think once you complete them will have you ahead of 80% of the other people who are just starting to use AI right now. If you are interested in this learning experience, go to B-super.AI and sign up using code June. You'll get 25% off your first month and I'll automatically add you to that AI for beginners group. That's B-super.A.I. Discount code June. See you there. Welcome back to the AI Daily Brief. AI wearables have been a hot topic of discussion for the last several months, first from a hype cycle perspective, but then because a bunch of them started to actually launch. However, as we've discussed on this show, the launches haven't necessarily gone all that well. In fact, YouTube product reviewer Marquez Brownlee has generated pretty significant controversy

Starting point is 00:09:17 by calling some of these the worst product launches he's ever seen. Now, to be fair to Brownlee, he's clear that he sees glimpses of the potential. And he also blames the problem not just on the AI industry, but around a broader trend in technology to release something with lots of promises but in a very early incremental state and hope that you have time to get it right after the launch has actually happened. The two biggest launches have been the Humane AI PIN and the Rabbit R1. Neither have gone particularly well, and now it seems like the chickens are coming home to roost as Bloomberg is reporting that Humane is actually exploring a potential sale. writes Bloomberg, AI startup Humane has been seeking a buyer for its business according to people familiar with the matter. Just weeks after the

Starting point is 00:09:56 company's closely watched wearable AI device had a rocky public launch. The company is working with a financial advisor to assist it and is seeking a price of between $750 million and a billion dollars in a sale. To get a sense of the economics of this company, they have been building for the last six years. It was founded in 2018 by two Apple veterans and raised their last big round last year at a valuation of $850 million. Overall, the company has raised $230 million to date. The purpose of this episode is not to relitigate what people have complained about with the PIN, but Bloomberg points to the $699 price plus the ongoing subscription, as well as areas like battery life to vice overheating accuracy and response time. There have been a lot of different takes and discussions on this.

Starting point is 00:10:36 Some are very skeptical that the company is going to be able to find a buyer at this price level. Darrow Boshenjo writes, Humane trying to find a buyer for its business after the disastrous AI pin launch is unsurprising. Expecting 750 million to one billion for it is downright hilarious. On the other end of the spectrum are folks who are celebrating big ambition. Nate Jones writes, I hope there is no dunking on the Humane team.

Starting point is 00:10:58 Ambition should be applauded. Easy to mock those who try and fail. Startups are hard as hell, especially consumer and especially hardware. They took a big swing and it didn't work. I hope they try another thing. Another line of discussion is about more fun. mental issues, whether there is some wrong thinking at the very heart of this set of wearables. Neil Seibart republished something that he had written last November where he said,

Starting point is 00:11:19 Based on what we see from big tech, voice interfaces are going to be positioned as a crutch for AI-infused interactions and discussions. This is both unimaginative and recycled. Did companies not learn anything from the smart speaker mirage at the late 2010s? Watching Humane's unveiling video, my throat became dry as just seeing the amount of talking required to use the device. The PIN's projection system is further evidence of the need for a screen to show information in context. I'm not sure how Humane can legitimately argue that they are freeing people from their gadgets when AI pinwheres need to hold up their arms and hands throughout the day to display projections. These are rather basic design dilemmas that are created

Starting point is 00:11:51 by removing screens from the equation. Shouldn't the goal be to lower or limit design friction with new age computers? For what it's worth, some of these are similar to the critiques that Marquez Brownlee had. The bigger thing that I think is interesting to contemplate, however, is this idea of just how big a deal voice is going to be. To watch the presentations from OpenAI and Google last week and Microsoft this week, there is clearly some amount of consensus among these big AI labs that voice-based interactions are going to be a key part of how we interact with AI in the future. I think it's reasonable to be more skeptical than they seem to be. Now, another line of conversation has to do with why they might be trying to sell so quickly.

Starting point is 00:12:24 Greg Cameron writes, Napkin Math on Humane Runway, raises 230 million total last round in March of 23, 247 employees times $320,000 a year, salary and benefits average, equal $79 million a year, plus capital-intensive R&D. What he concludes is that either they're going to sell or they're going to have to raise more money. He also suggests that it could be attractive for the talent and hardware developers for someone who wants to kickstart another product. One humorous response came from Siki Chen who wrote, if Humane pulls this off, I am immediately putting that investment banker on retainer. A natural question that follows from this news, if it is accurate and Humane does

Starting point is 00:12:58 end up selling, is how much the issues here were humane specifically? In other words, decisions that they made, specific approaches to their product, versus a large larger indictment of the AI wearable space in general. On that front, Chris Anderson writes, while everyone dances on Humane's grave, can I say how much I love the meta-ray bands? They look like regular raybans, i.e. great. And the AI just works. Also, the bone conduction audio is perfect for podcasts. This is an opinion that you will see frequently on AI Twitter. Despite it having comparatively little fanfare, the form factor of something that people are already using in these sunglasses is making this product something that people really love. Which of course

Starting point is 00:13:34 brings up the other question, are there other form factors that aren't being explored yet? Mickey Friedman writes, with so many AI wearables launching, I'm surprised there are no AI lockets. Not for parity, but practicality. Women drive 80% of consumer purchases and already wear necklaces. A sneaky accessory that analyzes conversations would blow up on TikTok, especially if it's cute. And for however much skepticism there is, there are still plenty of entrepreneurs who are very excited about the AI wearable space. Dan Sir Rocker, the CEO of the company behind Rewind, which is very similar to the recall product that Microsoft just announced, took to X to explain what he thought about Microsoft recall

Starting point is 00:14:08 given how similar it was to the rewind product. One of the things that he said is that his company had become convinced that the desktop-based interface might not be the best way to interact for a tool like that, which is why they had moved so aggressively into a wearable space. Avi Schiffman, who was working on something previously called the tab, now called Friend, complete with the URLFriend.com, is teasing another design forward wearable with more information to be revealed at the end of July. We don't know exactly how obvious strategy

Starting point is 00:14:35 has changed and what the vision of this wearable is, but it's clear that we are not yet at the end of the experimentation cycle when it comes to these companies. TLDR, while it's completely legitimate to ask how much a particular company's challenges reflect misplaced assumptions of the industry that they're in, I think when it comes to AI wearables, it's still too early to draw broad conclusions. We are just scratching the surface of the experiments that will happen, and while it might absolutely be that none of these exactly figure out product market fit, we won't know until people try. Seems like there's still plenty of appetite to try out there, so I'm sure you will be hearing about it more here on the AI Daily Brief. For now, though, that is going to do it for this

Starting point is 00:15:10 episode. Until next time, peace.

The AI Daily Brief: Artificial Intelligence News and Analysis - After Rough Launch, is Humane AI Pin Looking to Sell?

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