Rabbit returns with AI software platform after hardware struggles

Rabbit, the company behind the controversial Rabbit R1 AI assistant gadget, is refocusing on software after struggling with hardware sales. The R1, launched in 2024, faced harsh reviews for its agentic features, which failed to deliver on promises. However, Rabbit claims the device was commercially successful, with over 100,000 units sold and a 45-50% margin. Jesse Lyu, Rabbit's founder, says the company raised $60 million and employs 15 people, but faced financial strain in 2025 due to regulatory issues in India. Rabbit is now shifting focus to OS3, an open, cross-platform agentic system that runs on existing devices. OS3 allows users to integrate third-party AI agents and execute tasks across desktops, phones, and messaging apps. Lyu demonstrated how OS3 can handle tasks like data entry and even represent him on Slack during a video shoot. The platform uses Rabbit’s DLAM technology and operates on a "Bring Your Own Key" model, with no subscription fees. Rabbit no longer manufactures the R1, and existing stock is dwindling. The company plans to release a Cyberdeck, a "vibe coding" machine, within months. OS3, now available for free, challenges the notion that a dedicated AI gadget is necessary, as users can leverage existing hardware for advanced AI tasks.