AI Startup Unveils $99 ‘Friend’ Necklace, Raising Eyebrows and $2.5 Million

By Jose Antonio Lanz

Remember Tamagotchis, the pocket-sized virtual pets that had millennials glued to tiny screens in the 90s? Well, they're back—sort of. A California-based startup called My TabAl, Inc. purchased the domain friend.com for $1.8 million to launch its entry in the rapidly burgeoning, virtual best-friend market: a $99 AI-powered necklace dubbed ‘friend’ (yes, lowercase).

The device is expected to ship early next year. Judging by the information and videos available that started hitting the net this week, the ‘friend’ necklace is essentially a ChatGPT wrapper you wear around your neck. It's always waiting for you to talk to it and listening to your every word, even when you’re talking to someone else—so it can shower you with nice messages and cute responses—written, not spoken—like a digital shoulder to cry on, without robotic arms to actually pat your back.

It almost goes without saying that just about everyone writing or tweeting about the device is comparing its promotional video to the dystopian series Black Mirror.

That said, the brainchild of Harvard dropout Avi Schiffmann, 'friend' has managed to charm investors to the tune of $2.5 million. That's a $50 million valuation for a device that does... well, not much beyond listening to your conversations and, occasionally, proactively weighing in on what you’re saying.

The list of backers reads like a who's who of tech and media: Caffeinated Capital's Raymond Tonsing, Z Fellows founder Cory Levy, Perplexity CEO Aravind Srinivas, Solana founders Anatoly Yakovenko and Raj Gokal, Morning Brew's Austin Rief, and even Google senior product manager Logan Kilpatrick.

According to Schiffmann, the ‘friend’ necklace is meant to combat loneliness. It connects to your phone via Bluetooth and and texts you there when it has something to say. If you're in need of a pep talk or just some company, you can press the walkie-talkie button on the device and pour your heart out. 'Friend' then sends a text in your phone’s companion app.

But here's where it gets a bit... unsettling. Because ‘friend’ is always listening and—according to its terms of service and privacy diclosures—it collects any info you give it, like names, billing addresses, email addresses, and phone numbers. So maybe it’s like having an overly-attached, stalking friend who works for the CIA? It can also send unprompted messages. Imagine getting a "Good luck on your interview!" text out of the blue, or “She’ll never go for you.” Sweet or creepy? You decide.

Schiffmann didn't inmediately respond to a request for comment from Decrypt, however, he insists this isn't meant to replace human interaction or act as a therapist. “I would really view the product as like an emotional toy,” he told TechCrunch. "With hardware present, I believe it is a better emotional connect.”

The ‘friend’ necklace isn't alone in the AI wearable space (Rabbit and Humane have already released similar devices) and it’s not even the first “friend.” A company called Based Hardware has already launched its own Friend AI necklace for $69. That open-source wearable comes with a developer kit, allowing third parties to add functionality —potentially making it more than just a glorified chatbot on a string.

Based’s founder is none too pleased about the unfriendly competition. In a twist that reads like Silicon Valley fan fiction, the developer dropped a diss track aimed squarely at Schiffmann, going so far as to challenge him to a physical fight. Who knew AI friendship could be so combative?

For those keeping score at home, this isn't Schiffmann's first rodeo with AI products. Last year, he raised $1.9 million to launch a $600 pendant called Tabs for tracking people and transcribing meetings. That project didn’t really make it due to "privacy concerns," and now pre-order customers are being offered the option to switch to ‘friend’ or get a refund.

And, of course, there's so much money being poured into AI companions that a boxing match between two CEOs is not an entirely crazy idea.

"In 2022 the worldwide funding of the AI companion industry hit a milestone of $299 million, witnessing excellent growth from just $7 million in the previous year 2021," AI analytics site What's the Big Data said in a report from May. "The global AI Girlfriend market was valued at $2.8 billion and the market is projected to reach a milestone of $9.5 billion by 2028."

People have more friends than lovers, so you do the math.

If you don’t think the idea of having a physical device around your neck creates a stronger emotional connection than just another app on your phone, you may want to try our own just-for-fun AI companion that does the exact same thing. Push a button, talk to it, and get a useless but nice response in text format. We named it fRiEnD-GPT —and it’s free. Or better yet, get a Tamagotchi.

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