AI
Rabbit Shifts Strategy, Launches AI Agent OS That Works Across Your Devices
After the R1 hardware faced poor reviews, Rabbit is pivoting to OS3, a cloud-based agent system accessible via desktop, Telegram, and iMessage that coordinates tasks across multiple machines.
WIRED — AI
Rabbit is making a bold strategic pivot. Having launched the R1 handheld device to considerable fanfare and subsequent criticism in 2024, founder Jesse Lyu is now betting on OS3—a software-first "agentic operating system" that can run on devices you already own. Instead of a dedicated gadget, users can access the system through a desktop browser, Telegram, or iMessage.
From Hardware to Software#
The company's earlier R1 device earned a reputation for overpromising. Though it generated initial interest at CES 2024 as one of the first AI-powered handhelds designed to complete real-world tasks like booking rides or ordering food, it quickly disappointed users and reviewers alike. WIRED's review gave the device a 3 out of 10.
Yet Lyu contends the R1 was not a commercial failure. He claims the company shipped over 100,000 units with a return rate below 5 percent and achieved healthy profit margins on the hardware. The real bottleneck, he suggests, was resource constraints—Rabbit operates with only 15 employees and roughly $60 million in total funding, dwarfed by competitors that raised billions.
The company faced steep challenges. A planned India expansion fell through due to regulatory issues, prompting financial hardship that led some staff members to claim they went unpaid. Still, Lyu says Rabbit has stabilized, secured additional funding, and pivoted strategy. Rather than rush to new hardware, the team focused on shipping iterative software updates to the R1—around 50 in the past year and a half—while opening the platform to third-party AI agents.
How OS3 Works#
OS3 operates as a unified, cloud-based system that orchestrates tasks across multiple computers. It connects to your machines through a local agent node installed on Windows, Mac, or Linux, letting it access desktop applications, files, and web pages. A single account can manage up to five devices, with the system deciding which machine should execute each task.
The interface uses what Lyu calls a "brain dump" approach: a continuous chat stream where you state your intent, and the system marshals the necessary models and tools. Users can paste URLs for third-party agent skills, and OS3 installs them automatically.
OS3 uses Rabbit's DLAM (Direct Large Action Model) technology to execute local software tasks and autonomously write and debug code. The service follows a "Bring Your Own Key" model—no subscription required, but users supply API credentials from providers like OpenAI or Anthropic, or connect local open-source models.
