The new app, split into top ranks in the App Store, has a very 2025 proposal. Allow AI data companies to record calls in exchange for money.
Neon Mobile was released just a week ago, but for a short time on Thursday it was more popular than Meta's threads on the Apple App Store.
However, the success story, rising late Thursday, quickly returned to Earth after data security vulnerabilities entered the spotlight. The app was then taken offline for a security audit that CEO Alex Kiam said it would take Business Insider a week or two.
Neon's premise is simple. Allows the app to record itself while you're on the phone. The company said it would pay 30 cents per minute on calls with other neon users, or half of that would pay if there were no other callers in the neon market. The app then states that the data is “anonymized and sold to trusted high-tech companies.”
“Telephone companies are profiting from your data. Now you can do that too,” reads Neon's website.
Aside from what sounds like something from the “Black Mirror” episode, this arrangement naturally raises all sorts of privacy concerns. It also shows the creative ways companies are finding to provide AI companies with the large amount of data they need to train their models.
These privacy concerns were frontline and centered on Thursday when TechCrunch reported that it had discovered a security flaw that “can access other users' phone numbers, call recordings, and call transcripts.”
In one case, TechCrunch found that “Neon servers can generate data about the latest calls made by app users, providing public web links to raw audio files and transcript text of what was said in the call.
Kiam told Business Insider that neon will remain offline until the team fixes security issues and conducts a full security audit. The company also said it would establish new security safeguards, including adding row-level security.
In an earlier call Thursday before TechCrunch reported on Neon's security vulnerabilities, Kiam said the rise of the app surprised him.
Related Stories
Business Insider tells the innovative stories you want to know
Business Insider tells the innovative stories you want to know
“To be honest, I didn't think this would grow this fast. I was hoping to get to this level and beyond, but I didn't expect everything to be this fast,” Kiam said.
According to LinkedIn, Kiam, a graduate of Stanford's MBA program in 2024, is 31 years old and previously worked for the AI training platform Protege AI.
How Neon works (when available)
Neon Mobile interface screenshot Business Insider
Neon is similar to other phone apps, but it's what happens behind the scenes that distinguish apps from others.
To get started, users download the free app and check the number. You can then use the app's PhonePad interface to place and receive calls.
From that point on, they can begin generating revenue, but only calls made or received via the Neon app. (For example, using the default phone app on your iPhone or Android will not generate payments.)
Neon's terms of service states that the app only records the call's side. You then pay up to $30 a day, up to $30 a day, or 15 if you're not a neon user. According to the company's online FAQ, payments will be processed within three business days, but “even though the timing may be shorter or longer.”
Neon's terms state that they will remove any personally identifiable information about the recording before the data is sold to AI companies.
“If anything, it's just too offensive,” Kiam told Business Insider on Thursday, talking about the app's filtering process. “There are things that I don't personally identify and actually get me to be valuable to AI companies. But rather, I would rather be completely anonymized, but rather make a mistake.”
Kiam said Neon has yet to reach a contract to sell the data.
Some state laws require that both parties agree to be recorded. In two-party consent states, both participants must give consent to the call to record, as opposed to one party state that only one participant needs. It's not completely cut and dry, especially if someone is calling from a condition that has different requirements than where the person they are calling lives.
“We spent a lot of time making sure we were legally compliant,” Kiam said. The startup is made up of four people, he told Business Insider.
Neon had 299 downloads as of September 18th, according to app tracking company AppFigures. As of Wednesday, the company estimates that 81,000 people have downloaded it.
According to data from AppFigures, the app actually began taking off from midnight on Wednesday.
By Friday morning, and by the time TechCrunch reports and apps went offline, the overall popularity of neon was beginning to decline. It ranked 14th overall among the free apps on Apple's App Store. Among the social networking apps, it fell third behind Meta's WhatsApp.
The industry quickly emerged in training data providers, as big tech companies and AI pioneers like Openai Race, to develop unprecedented AI models.
The most famous of these training companies is probably Scalley. Founded in 2016, Scale AI pays contract workers and labels AI training data. In June, Meta spent around $15 billion to win a 49% stake. As part of the deal, Scale co-founder Alexandre Wang led the new Superintelligence Lab with Meta joining as the top AI executive.
