The blight of internet-connected devices continues as Moxie, a cute AI-powered robot for children, is being killed. The company behind it, Embodied, explained on an FAQ page that an expected funding round fell through at the last minute, and it can no longer afford to remain in business.
We all know by now the frustration caused when devices that require cloud connectivity lose support from their manufacturers. Customers often end up with a bricked device or one that is severely neutered as core features stop working.
This story is made sadder because the Moxie is aimed at children ages 5 to 10 years old and is specifically marketed as a trusted companion for them to discuss their interests and emotions. It can also play games, teach educational lessons, and tell stories. Well, it could until now—Embodied says “Moxie relies on cloud connectivity for its core features, and it will not function once services end” which could happen any day now.
We already have seen evidence that impressionable children are able to suspend disbelief and lean on AI chatbots for emotional support and advice—sometimes to a dangerous degree. Parents will now have to explain to children who may have developed a bond with their Moxie’s why they are going to stop working. Because Embedded was nearing a new round of funding but the lead investor “withdrew leaving us with no viable options to continue operations.” Try explaining that to a 7-year-old.
To add insult to injury, buyers of the Moxie—which cost a whopping $799—won’t be receiving a refund either. Startups require a fierce determination and blinding confidence that things will work out, and stories are aplenty of founders white-knuckling it, narrowly avoiding death at every turn. But the consequence here is that Embodied apparently spent every last penny it had without a plan B in the event this supposed funding round didn’t come through. It did not save enough rainy day money to offer refunds to customers.
There remains a lot of debate over the use of AI bots to combat loneliness and replicate friendships; the research is still nascent. While they do have a lot of characteristics that people seek in friendships, like being supportive, there is some concern that they will be used as a replacement for real friendships among people who are the most isolated. Chatbots are very agreeable. That’s not necessarily going to teach children to become a well-adjusted person. And there have been multiple instances of adolescents receiving alarming and dangerous advice from chatbots. Embodied said Moxie utilized AI trained by child development experts to increase empathy, rather than a more general AI model.
Embodied has raised $19 million to date since 2016, according to PitchBook. But hardware is a tough business, and many startups have flamed out over the years trying to make it. Developing and iterating consumer hardware is much more difficult than building an app. And there’s an economy of scale required for these types of companies to become profitable. $800 for a kid’s toy is surely a big ask for most parents.
The hardware landscape is riddled with flameouts, from Pebble to Jawbone—and newer companies like Humane and Rabbit don’t seem to be doing too well. Humane recently cut the price of its AI Pin with sales reported in the low tens of thousands and returns skyrocketing as buyers found the device had poor performance and didn’t include promised features. The company has raised a quarter of a billion dollars in funding.
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