After relying on artificial intelligence programs to help power its on-demand blood sugar sensors, Know Labs has spun out a new AI-focused company to explore the substantial data they generate—including their use in a potentially novel revenue stream.
The company has latched onto the recent craze for trading nonfungible tokens, raising $4.2 million from sales of images that were algorithmically created using patterns driven by its deep learning platform. Known as NFTs, the blockchain-powered tokens act as digital certificates of authenticity linked to particular pictures, files or pieces of audio or video.
In Know Labs’ case, the company said the proceeds will be used to fund work on AI technologies through its new subsidiary, AI Mind, and support their development in connection with its noninvasive glucose monitoring KnowU and UBand devices.
“We were stunned to discover that the AI engine we have developed can, in addition to identifying molecules noninvasively, also create unique, digital patterns from our test data,” Know Labs CEO Phil Bosua said in a statement.
The company said it has sold over 1,000 NFTs to collectors so far, collecting more than 1,000 Ethereum, a blockchain-based cryptocurrency. Know Labs also expects to generate additional revenue from NFT sales in the current fiscal quarter and to report the earnings to the Securities and Exchange Commission in February 2022 filings.
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linked to the company's "Explosions of Color"
NFT series, currently trading for tens of
thousands of dollars. (AIIV / Vora / Bosua)
“The ability to generate substantial revenue from a subsidiary created to monetize our trade secret AI algorithms is significant, because it potentially provides a new source of funding for our work toward developing what we believe will be the first medical-grade, noninvasive glucose monitoring device,” said Know Labs Board Chairman Ron Erickson.
The company’s hand-held diabetes sensors employ what it has dubbed Bio-RFID technology, which uses radio waves to measure specific molecule signatures in the bloodstream without the need for lancets or fingersticks.
The wearable UBand is currently being submitted for FDA review, while the pocketable KnowU device is slated to undergo clinical studies. The company also plans to launch a “200-participant internal clinical trial” to help refine its AI algorithms, Erickson said.
But Know Labs is not the only place where NFTs and the medtech industry now intersect. An early investor in Theranos, Marc Ostrofsky, has begun auctioning off the digital rights to his series A stock certificate in the doomed blood testing startup, signed by founder Elizabeth Holmes herself.
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In 2005, Ostrofsky invested about $100,000 in the company after meeting Holmes and hearing her pitch for the Edison device. That investment would later balloon to $22 million before the company collapsed.
Now aiming to recoup some of that amount, he aims to sell what’s been titled as "The Rise & Fall of Theranos NFT"—entitling the bearer to the physical copy of the historical artifact—before verdicts are handed down in Holmes’ ongoing federal trial.