Jesse Lyu doesn't think the Rabbit R1 was a flop. The gadget was among the first to offer AI agency, allowing you to book a ride or order food by speaking into the device. Despite scathing reviews, Lyu argues the R1 was a success, delivering over 100,000 gadgets worldwide and earning a 45 to 50 percent margin on hardware.

Now, Lyu's Rabbit is back with OS3, a standalone agentic operating system that can run across multiple screens or through a desktop browser, Telegram or even iMessage. This marks a striking pivot for a company that once championed the handheld hardware over smartphone apps, but the environment for this type of software has ripened.

The new OS3 is designed to be more open, allowing users to integrate third-party agents into the R1. Lyu says today's R1 is completely different from its launch, with around 50 updates in the past year and a half. The company's focus now is on its new OS3 software platform, which will work on other hardware you already own. Rabbit has no plans for an R2, instead releasing a Cyberdeck—a dedicated coding machine that will run OS3.

OS3 operates in the cloud but connects directly to desktop software, files, and web pages through a local agent node. Using Rabbit’s DLAM technology, it can execute local software tasks and autonomously write and debug code. One account can link up to five machines, with OS3 determining which device should execute a given task. Lyu has been using OS3 to handle various tasks, such as automating the process of adding data to a master sheet from weekly Excel reports.