OpenAI has acquired io Products, a hardware startup co-founded by legendary Apple designer Jony Ive, in a landmark all-stock deal valued at $6.5 billion. The move brings Ive on board as OpenAI’s creative head, positioning the company to develop next-generation devices tailored for the era of generative artificial intelligence.
The acquisition marks a bold step for OpenAI as it aims to expand beyond software and into hardware platforms, an area where several startups have struggled. Ive, best known for designing the iPhone and other iconic Apple products, launched io Products just a year ago. His design firm LoveFrom has been collaborating with OpenAI for the past two years on AI device concepts.
OpenAI CEO Sam Altman and Ive announced the deal in a blog post and video, expressing a shared vision to move beyond legacy tech such as smartphones and explore entirely new ways to interface with AI. “The products that we’re using to deliver and connect us to unimaginable technology… they’re decades old,” Altman said. “Surely there’s something beyond these legacy products.”
While details remain under wraps, Altman teased a prototype of a device he described as “the coolest piece of technology the world will have ever seen.”
The strategic acquisition comes as Apple faces criticism for lagging behind in AI integration. Its recently unveiled “Apple Intelligence” suite, which incorporates ChatGPT, has yet to match the advanced AI features available on many Android devices. Apple’s shares dipped over 2% following the OpenAI announcement.
Industry analysts view the deal as part of a larger trend. “OpenAI is interested in owning the next hardware platform so they don’t have to rely on Apple iOS or Google’s Android,” said Gil Luria of D.A. Davidson, likening it to Meta’s efforts with Quest VR headsets and Ray-Ban smart glasses.
The hardware AI frontier has proven challenging. Startups like Humane AI and Rabbit have launched niche devices, but results have been mixed. Humane’s AI Pin was discontinued after HP acquired its assets, while Rabbit’s R1 devices, despite selling over 100,000 units, face criticism for limited functionality.
With Ive’s design prowess and OpenAI’s technological leadership, the duo could finally crack the code for AI-native consumer hardware.
