Relay, an artificial intelligence (AI)-powered workflow automation tool, shut down completely in August 2026 after five years of development. The product once attracted considerable attention for its ability to use AI agents to handle emails and manage tasks.
However, as OpenAI, Google and other major platforms integrated similar features into their products, Relay gradually lost its competitive edge. Maintaining a standalone application became increasingly difficult when users could perform similar tasks directly on platforms they were already familiar with.
More recently, Character.ai, a platform that allows users to chat with AI characters, has also joined the list of startups facing difficulties after five years of operation.
According to S&P Global, approximately 42% of AI initiatives are eventually abandoned by the companies developing them. The reasons range from insufficient funding and technical obstacles to intense competition, difficulties scaling up, and an inability to attract enough users.
These cases are contributing to a growing list of failed AI products, even as the sector continues to attract substantial investment.
AI Startups That Once Held Great Promise
Humane AI Pin was one of the most notable failures in the AI device market. Designed to replace some of the functions of a smartphone with a wearable device, the product helped Humane raise $230 million from investors.
However, AI Pin faced repeated complaints about its performance. The company also had to warn customers to stop using its charging case due to the risk of battery fires. In February 2025, Humane discontinued the product before HP acquired most of its assets for $116 million.
Rabbit R1 also attracted attention when it debuted at CES 2024. Marketed as a device capable of performing a range of tasks on behalf of users through AI, it sold 100,000 units in its early days.
Nevertheless, initial reviews found the product unfinished, unreliable in operation, and lacking genuinely useful features. Unlike Humane, Rabbit has continued to release device updates and develop new hardware projects.
In the software sector, Yupp once allowed users to compare answers from more than 800 AI models, including products from OpenAI, Google and Anthropic. However, the platform shut down in March 2026 after failing to attract a sufficiently large customer base and generate enough market demand.
Huxe, an application that converts text into podcast-like audio content, also ceased operations in May 2026 as major platforms began offering similar features. Figgs AI, a virtual character creation service that had attracted more than one million users, was forced to shut down because the cost of maintaining its free service was too high.
Character.ai is another notable case. The startup raised $150 million in 2023 at a valuation of $1 billion. A year later, Google reportedly paid $2.7 billion to license its technology and bring its two co-founders back to work. The platform subsequently faced lawsuits concerning the impact of chatbots on teenagers, as well as disputes over the use of copyrighted characters.
Even Tech Giants Have Stumbled
Startups are not the only ones affected; leading technology companies have also had to modify or abandon numerous AI products.
OpenAI once experimented with turning ChatGPT into a “super app,” integrating Chat, Codex and Work modes into a new interface in July 2026.
However, the change quickly drew negative reactions for making the application more confusing, prompting the company to restore its familiar interface.
OpenAI has also scaled back its standalone applications, moving many features directly into ChatGPT.
According to the original article, the ChatGPT Atlas browser ceased operations in August, while the Sora video platform shut down in March 2026 due to high operating costs and difficulties retaining users.
Apple has also encountered setbacks in its plans to upgrade Siri with AI. Although the revamped assistant was announced in 2024, its launch has been repeatedly delayed due to technical issues.
Meanwhile, Microsoft’s Recall feature, promoted as a visual memory tool that helps users retrieve their past activities on a computer, had its release postponed by nearly a year amid security and privacy concerns.
Notion Mail, an AI-powered email application launched in April 2025, is also reportedly set to be discontinued as users turn to other AI agents to manage their inboxes.
(Source: Báo điện tử VTC News)
