OpenAI has made a bold move by acquiring the AI hardware startup io in an all-equity deal valued at $6.5 billion. This acquisition brings together the expertise of Sam Altman, OpenAI’s CEO, and Jony Ive, the renowned former Apple designer, who now leads the creative and design work at OpenAI through his design firm, LoveFrom. This collaboration marks a significant step as OpenAI looks to expand its footprint beyond AI software and delve into developing AI-powered consumer hardware.
Jony, famous for his work on Apple products such as the iPhone, iPod, iPad, and Apple Watch, is now at the helm of a new wave of generative AI technology. His input will be crucial in helping OpenAI directly compete with Apple in the consumer hardware space. Apple has recently struggled to keep up with OpenAI and Google in the AI race, and this partnership could intensify the competition. Following the announcement, Apple’s stock saw a 2% drop, reflecting the market’s concerns over the growing rivalry.
The startup io, with a team of around 55 engineers and designers, including former Apple employees, will now join OpenAI. This team will be tasked with developing AI-powered devices, with the first product expected to debut in 2026. OpenAI’s existing 23% stake in io made this acquisition easier, with Altman noting that the goal is to create a range of AI devices that will allow users to use AI in innovative and practical ways, moving beyond the limitations of current devices like laptops and smartphones.
In addition to launching new AI devices, OpenAI’s acquisition of io represents the company’s first significant move into the consumer hardware market. While the specifics of these new devices are still unclear, Altman has expressed a desire for them to integrate more seamlessly into everyday life, addressing the limitations of existing computing tools. This shift is part of OpenAI’s broader ambition to change the way AI is used by consumers, making it more accessible and deeply integrated into daily activities.
The AI device market is still in its early stages, with several companies, including Meta and Google, launching their own AI-powered devices. However, OpenAI’s unique combination of AI expertise and innovative design could pave the way for new, ground-breaking products. As the world of AI devices evolves, this partnership between OpenAI and Jony Ive could play a pivotal role in shaping the future of AI-powered consumer technology.
