OpenAI has acquired io Products, the hardware startup co-founded by legendary Apple designer Jony Ive, in a $6.5 billion all-stock deal, and named him creative head of the company as it seeks to build breakthrough devices for the generative AI era.
The move marks OpenAI’s most ambitious hardware play yet, combining Ive’s iconic product design legacy with the company’s fast-evolving AI capabilities. Ive’s design firm LoveFrom has been collaborating with OpenAI for the past two years, exploring new device concepts designed to move beyond the traditional smartphone and laptop interfaces.
“The products that we’re using to deliver and connect us to unimaginable technology — they’re decades old,” said Sam Altman and Jony Ive in a video posted to OpenAI’s blog.
“Surely there’s something beyond these legacy products we have.”
Altman teased a working prototype — calling it “the coolest piece of technology the world will have ever seen” — though no product details were shared.
Strategic Implications
OpenAI previously held a 23% stake in io Products, according to a source familiar with the matter. The $6.5 billion valuation is based on OpenAI’s estimated market value of $300 billion.
This acquisition underscores OpenAI’s desire to control its own hardware platform, breaking away from reliance on Apple’s iOS or Google’s Android to distribute its AI services, such as ChatGPT and other generative tools.
“OpenAI is interested in owning the next hardware platform so they don’t have to sell their products through Apple or Google,” said Gil Luria, analyst at D.A. Davidson.
Competitive Landscape
The AI hardware category is heating up, with recent attempts including:
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Humane’s AI Pin, developed by ex-Apple executives, which was recently shut down and acquired by HP after poor reception due to limited battery life and high cost.
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Rabbit’s r1 device, which sold over 100,000 units but has drawn criticism for limited functionality compared to smartphones.
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Meta’s Quest and Ray-Ban smart glasses, part of the company’s long-term push into AI-powered wearables.
Apple, meanwhile, has been slow to integrate generative AI tools, with its Apple Intelligence features lagging behind offerings on Android. The news of Ive’s alignment with OpenAI sparked a more than 2% drop in Apple shares.
What’s Next?
OpenAI now positions itself not just as a software leader in AI, but as a potential hardware disruptor, aiming to redefine how users physically interact with intelligent systems. With Jony Ive on board and a prototype already in development, the tech world is watching closely to see if OpenAI can succeed where others have faltered.