Of all the questions I have around the new AI on the block, Friend, I must admit that this one is the least of my worries. Like the rabbit that went before it, this gadget promises to address problems that are of a questionable existence. I understand that’s marketing 101 — overstate a concern and sell people a fix. However, they intend to do this by faking a conversation with a ‘friend’ and with it burn through resources that don’t fit their income stream.

There’s no question that these types of devices are going to start popping up all over the place. AI is the new buzzword to cram into every single service you have, and lately the new trend is making physical things. Despite many companies not really knowing what to do with it and still cramming it in. Whilst never making any money anyway.

We’ve long known that the balance sheets of darling valley companies like Open AI are massively in the red. Meta, Google, and Apple are also spending Billions trying to catch the craze and still can’t make a useful enough product to turn a profit, so why exactly are all these start-ups joining in, you might wonder? I suspect for nothing more than cashing in on the latest investment craze into AI businesses.

Rabbit was the first company to offer what on the surface appears a great deal for customers, but underneath promises to be an untenable business position. Their Rabbit R1 is available for a one-off fee of £199, with no monthly subscription. Which gives the company zero income to pay for continued usage of their cloud AI infrastructure ‘Rabbit OS’. A weird decision given that almost every instruction needs off device processing — with mixed results.

Friend clearly feel flush with cash, given they paid $1.8million just for their domain name, however their reported $2.5million (at a valuation of $50million) investment from some Silicon Valley heavyweights won’t last long. Their basic white version of their pendant retails at just $99. A price that will barely pay for a few months of server time for the recordings taken on the constantly listening device. Listen, I get that people are lonely, but let’s be clear on this part, this device is constantly listening and sending your data to their servers. This isn’t a Siri or Alexa dormant way, in a proactive Black Mirror inducing nightmare way—even if the company claims not to be storing any of the recordings.

Unless there is a drastic change to Ai processing needs, companies selling these devices are only going one way. To burn through investment cash and then ask their users for money. There simply isn’t another way to fund this. AI companies are loosing a tone of money and many people are starting to think that they are fighting a loosing battle. My worry is that users who buy these devices in good faith will be left holding the baby, or a device that no longer works.