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Sam Altman's Eyeball-Scanning Startup Hits Reality: $240M Raised, Global Bans Mounting, and Questions About What It Actually Does

MarketDash Editorial Team
17 days ago
Sam Altman's Tools for Humanity raised $240 million to scan 1 billion irises and verify humans from AI. But with only 17.5 million users, mounting government bans across seven countries, and former employees questioning the business model, the ambitious biometric venture is facing serious headwinds.

If you're going to build a giant metal sphere that scans people's eyeballs to prove they're human and not AI, you'd better have a plan for when governments start asking questions. Sam Altman's Tools for Humanity is learning this lesson the hard way.

The company's volleyball-sized device, called the Orb, scans human irises to generate a "World ID" for digital verification. The pitch is straightforward: as AI gets better at mimicking humans, we need a way to prove who's real. Scan your eyes, get access to the World app ecosystem, and claim some World cryptocurrency tokens (formerly Worldcoin) worth about $0.80 each.

Here's the problem. Altman and co-founder Alex Blania launched this venture in 2019 with an ambitious goal: verify 1 billion users. They've raised $240 million from heavyweight investors including Andreessen Horowitz, Bain Capital, and Khosla Ventures. The startup carries a $2.5 billion valuation. But according to Business Insider, they've only reached 17.5 million people. That's less than 2% of the target.

The Regulatory Wall Gets Higher

Government agencies around the world aren't just skeptical—they're actively shutting things down. Spain, India, Indonesia, Kenya, Colombia, Thailand, and the Philippines have all taken regulatory action against the company's operations. Three countries issued orders against the startup in October alone.

The specifics are pretty damning. The National Privacy Commission in the Philippines issued a cease-and-desist order, saying the eyeball scanning violated the country's data privacy act. Colombian regulators ordered immediate cessation of operations and demanded the company delete all data it had collected. Thai officials went further—they raided iris scanning locations and arrested suspects for running an unlicensed digital asset business.

Tools for Humanity says it's appealing the Colombian decision, but the regulatory pressure isn't letting up. German authorities concluded that the company's data protection measures wouldn't provide adequate security against cybercriminals or state-level attackers. That decision is on hold while regulators evaluate new technology, and Tools for Humanity is appealing. Even China's Ministry of State Security weighed in, warning that collecting iris data for cryptocurrency could pose a national security threat.

The Business Model Question Nobody Can Answer

When a cryptocurrency holds less than 0.1% of Bitcoin's roughly $2 trillion market cap, people start asking hard questions. "It's really just hard to judge something that's a crypto with a $2 billion market cap as anything other than experimental or a fad," Nikhil Bhatia, a finance professor at the University of Southern California who studies cryptocurrency, told Business Insider. "World is not a contender in any way for currency or an asset relative to the dollar or Bitcoin."

Former Tools for Humanity employees painted an even messier picture. In developing countries, people were primarily attracted by free cryptocurrency payments. Currency exchanges popped up near Orb stations in Latin America, where users immediately converted their tokens to cash, according to four sources and photos reviewed by Business Insider.

Kenya saw similar patterns before the country's High Court ruled World's operations unlawful in May and ordered permanent deletion of all biometric data. In Argentina, unaffiliated third-party organizers bused people to iris scanning locations specifically to collect cryptocurrency payments, according to local media reports.

Eight former Tools for Humanity employees spoke with Business Insider, and they raised serious questions about whether the company can build a sustainable long-term business. One former employee who worked on Latin American expansion said regulators repeatedly pressed the team to explain how the company planned to generate revenue. Nobody had a good answer.

Expensive Hardware, Unclear Path to Profitability

"I actually have trouble seeing it as a business," Martha Bennett, Vice President and Principal Analyst at Forrester, told Business Insider. "There isn't an incentive around buying or leasing an Orb other than making money off of it by scanning loads of eyeballs, and for the users, it's to get some more coins."

The economics are challenging. Two former employees said each Orb costs thousands of dollars to manufacture. In April, Blania acknowledged the company had already spent millions on development and deployment.

Tools for Humanity doesn't charge users for platform access, and Blania has said the company will avoid becoming a data broker. In spring 2024, the company introduced World ID fees for apps that use its verification services. There's also a community operator program that lets individuals rent or purchase Orbs for their own use within the system. Whether that's enough to support a $2.5 billion valuation remains an open question.

"I don't see a sort of killer use case that they've really figured out and will drive major traction for them," Nick Maynard, Vice President and Fintech Market Researcher at Juniper Research, told Business Insider. "There needs to be a real purpose to exist, and that isn't super clear as of yet."

The fundamental tension is obvious: you can't build a billion-user biometric verification system if governments keep shutting you down. You can't justify a multi-billion dollar valuation without a clear path to revenue. And you can't convince people your cryptocurrency is valuable when it represents a rounding error compared to established digital assets. Tools for Humanity has impressive backers and an interesting technical solution, but it needs to answer some very basic questions about what problem it's actually solving and for whom.

Back to News

Sam Altman's Eyeball-Scanning Startup Hits Reality: $240M Raised, Global Bans Mounting, and Questions About What It Actually Does

MarketDash Editorial Team
17 days ago
Sam Altman's Tools for Humanity raised $240 million to scan 1 billion irises and verify humans from AI. But with only 17.5 million users, mounting government bans across seven countries, and former employees questioning the business model, the ambitious biometric venture is facing serious headwinds.

If you're going to build a giant metal sphere that scans people's eyeballs to prove they're human and not AI, you'd better have a plan for when governments start asking questions. Sam Altman's Tools for Humanity is learning this lesson the hard way.

The company's volleyball-sized device, called the Orb, scans human irises to generate a "World ID" for digital verification. The pitch is straightforward: as AI gets better at mimicking humans, we need a way to prove who's real. Scan your eyes, get access to the World app ecosystem, and claim some World cryptocurrency tokens (formerly Worldcoin) worth about $0.80 each.

Here's the problem. Altman and co-founder Alex Blania launched this venture in 2019 with an ambitious goal: verify 1 billion users. They've raised $240 million from heavyweight investors including Andreessen Horowitz, Bain Capital, and Khosla Ventures. The startup carries a $2.5 billion valuation. But according to Business Insider, they've only reached 17.5 million people. That's less than 2% of the target.

The Regulatory Wall Gets Higher

Government agencies around the world aren't just skeptical—they're actively shutting things down. Spain, India, Indonesia, Kenya, Colombia, Thailand, and the Philippines have all taken regulatory action against the company's operations. Three countries issued orders against the startup in October alone.

The specifics are pretty damning. The National Privacy Commission in the Philippines issued a cease-and-desist order, saying the eyeball scanning violated the country's data privacy act. Colombian regulators ordered immediate cessation of operations and demanded the company delete all data it had collected. Thai officials went further—they raided iris scanning locations and arrested suspects for running an unlicensed digital asset business.

Tools for Humanity says it's appealing the Colombian decision, but the regulatory pressure isn't letting up. German authorities concluded that the company's data protection measures wouldn't provide adequate security against cybercriminals or state-level attackers. That decision is on hold while regulators evaluate new technology, and Tools for Humanity is appealing. Even China's Ministry of State Security weighed in, warning that collecting iris data for cryptocurrency could pose a national security threat.

The Business Model Question Nobody Can Answer

When a cryptocurrency holds less than 0.1% of Bitcoin's roughly $2 trillion market cap, people start asking hard questions. "It's really just hard to judge something that's a crypto with a $2 billion market cap as anything other than experimental or a fad," Nikhil Bhatia, a finance professor at the University of Southern California who studies cryptocurrency, told Business Insider. "World is not a contender in any way for currency or an asset relative to the dollar or Bitcoin."

Former Tools for Humanity employees painted an even messier picture. In developing countries, people were primarily attracted by free cryptocurrency payments. Currency exchanges popped up near Orb stations in Latin America, where users immediately converted their tokens to cash, according to four sources and photos reviewed by Business Insider.

Kenya saw similar patterns before the country's High Court ruled World's operations unlawful in May and ordered permanent deletion of all biometric data. In Argentina, unaffiliated third-party organizers bused people to iris scanning locations specifically to collect cryptocurrency payments, according to local media reports.

Eight former Tools for Humanity employees spoke with Business Insider, and they raised serious questions about whether the company can build a sustainable long-term business. One former employee who worked on Latin American expansion said regulators repeatedly pressed the team to explain how the company planned to generate revenue. Nobody had a good answer.

Expensive Hardware, Unclear Path to Profitability

"I actually have trouble seeing it as a business," Martha Bennett, Vice President and Principal Analyst at Forrester, told Business Insider. "There isn't an incentive around buying or leasing an Orb other than making money off of it by scanning loads of eyeballs, and for the users, it's to get some more coins."

The economics are challenging. Two former employees said each Orb costs thousands of dollars to manufacture. In April, Blania acknowledged the company had already spent millions on development and deployment.

Tools for Humanity doesn't charge users for platform access, and Blania has said the company will avoid becoming a data broker. In spring 2024, the company introduced World ID fees for apps that use its verification services. There's also a community operator program that lets individuals rent or purchase Orbs for their own use within the system. Whether that's enough to support a $2.5 billion valuation remains an open question.

"I don't see a sort of killer use case that they've really figured out and will drive major traction for them," Nick Maynard, Vice President and Fintech Market Researcher at Juniper Research, told Business Insider. "There needs to be a real purpose to exist, and that isn't super clear as of yet."

The fundamental tension is obvious: you can't build a billion-user biometric verification system if governments keep shutting you down. You can't justify a multi-billion dollar valuation without a clear path to revenue. And you can't convince people your cryptocurrency is valuable when it represents a rounding error compared to established digital assets. Tools for Humanity has impressive backers and an interesting technical solution, but it needs to answer some very basic questions about what problem it's actually solving and for whom.