In a significant development within the tech industry, HP has partially acquired the Silicon Valley AI hardware startup Humane for $116 million. This acquisition comes as a strategic move by HP to bolster its position in the rapidly evolving field of artificial intelligence. The acquisition price, however, fell short of Humane's initial ambitions, reflecting less than half of the $240 million in venture capital funding the startup had previously raised. While the exact number of layoffs following the acquisition remains unclear, the impact on Humane's workforce has been profound, with multiple employees facing immediate job loss.
The landscape of Silicon Valley is currently dominated by the demand for engineers skilled in building AI systems, making them some of the most sought-after talents in the industry. Despite this, HP's acquisition of Humane did not come as a surprise to those within the startup. On a day filled with uncertainty, Humane's chief of staff, Andie Adragna, called for an impromptu company-wide meeting via Google Meet, giving employees only an hour's notice to attend. The meeting set the stage for the subsequent wave of changes that rippled through the company.
On Tuesday, news broke that several Humane employees were laid off via email, with their access to company systems cut off immediately. This abrupt termination left many employees scrambling to understand their future prospects. Particularly affected were those who worked closely with Humane's product, the AI Pin. The device, which initially garnered negative reviews from early testers, faced declining sales and increasing returns, prompting a price reduction from $699 to $499. Following the acquisition, Humane advised customers to recycle their AI Pins, acknowledging that they would largely cease to function within two weeks.
Despite these challenges, some employees perceive Humane as a moderate success story in the startup world. The New York Times had reported in June that Humane sought to sell itself to HP for over $1 billion—a figure significantly higher than the final acquisition price. The reality of the sale underscores the volatile nature of startup valuations and market conditions.
While layoffs cast a shadow over the acquisition, there were also opportunities for some employees. Hours after the announcement, several Humane employees received job offers from HP, accompanied by pay increases exceeding 30%, stock options, and a bonus plan. This move highlights HP's intention to retain key talent and integrate them into its operations.
The transition will see Humane's cofounders, Imran Chaudhri and CEO Bethany Bongiorno, along with its AI operating system CosmOS, find a new home within HP IQ. This strategic alignment is expected to leverage their expertise and drive innovation within HP's AI initiatives.
The partial acquisition marks a pivotal moment for both companies. For HP, it represents an opportunity to strengthen its foothold in AI hardware and software development. Meanwhile, for Humane, it signifies a new chapter in its journey as part of a larger corporate entity.
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