ChatGPT maker – OpenAI has announced the acquisition of former iPhone designer Jony Ive’s AI devices startup called “io,” in a deal worth billions of dollars.
The transaction , reportedly an all-equity deal, is set to push the Sam Altman-led AI company firmly into the world of hardware. The deal is by far OpenAI’s largest and comes weeks after the firm agreed to buy AI-assisted coding tool Windsurf for $3 billion.
Ive is touted as the greatest designer in the world
On Wednesday, CEO Sam Altman announced that OpenAI will acquire io, a year-old design studio founded by former Apple design chief Sir Jonathan “Jony” Ive, for $6.5 billion. Altman described Ive, famed for designing Apple’s iconic products like iPhone, iPad, iPod, and MacBook Air, as the greatest designer in the world.
The acquisition, which has been regarded as the largest in the history of OpenAI, brings under one roof two of Silicon Valley’s most influential figures.
Founded by Ive and co-founders Scott Cannon, Evans Hankey, and Tang Tan, io has assembled roughly 55 designers, engineers, and researchers. After the acquisition, most of that team will join OpenAI, reporting to Peter Welinder, the company’s vice president of product, while Ive and his LoveFrom studio retain independence to pursue other design projects.
Altman and Ive say they plan to reveal their first AI-powered hardware designs next year. Their ambition is to move beyond the smartphone era, into what they call “ambient computing,” where lightweight wearables such as glasses, pendants, or other form factors interpret and process the world in real time, fielding questions and analyzing sights and sounds without the friction of traditional screens or keyboards.
“We have been waiting for the next big thing for 20 years,” remarked 40-year-old Altman, pointing to the decade-old dominance of the iPhone as a personal device. Ive, 58, echoed that sentiment, framing their shared mission as creating “amazing products that elevate humanity.”
Both acknowledged that their relationship with current devices often feels overwhelming. Altman likened today’s smartphone distractions to “being bombarded with notifications and flashing lights in Las Vegas.”
OpenAI has previously tried its luck on other ventures
This is not OpenAI’s first flirtation with AI hardware. Altman was an early investor in Humane, the startup behind an AI pin, but that company folded when its initial product failed to gain traction. Even so, OpenAI’s own balance sheet is under pressure; the company anticipates about $3.7 billion in revenue this year and projects roughly $11.6 billion next year.
It recently closed a $40 billion funding round led by SoftBank, valuing it at nearly $300 billion, but still faces a looming deadline to convert from nonprofit origins to a fully profit-oriented structure, lest SoftBank halve its stake.
Despite these financial strains, Altman insisted the io purchase “makes sense” and brushed off concerns about funding. OpenAI also holds a 23% stake in io from a prior agreement, meaning the incremental cost to complete the acquisition is about $5 billion.
OpenAI declined to say how much of the $6.5 billion would be paid in cash versus equity, noting only that regulatory approval remains pending.
The pairing of Altman and Ive is rooted in a friendship that began when Ive’s 21-year-old son introduced him to ChatGPT. Intrigued by the chatbot’s capabilities, Ive met Altman and found in AI the creative frontier he’d been seeking after departing Apple in 2019.
“I shoulder a lot of the responsibility for what these things have brought us,” Ive said, reflecting on the anxiety and distraction engendered by always-on smartphones.
He sees AI hardware as an opportunity to reshape how people interact with technology, minimizing noise and maximizing human benefit.
For OpenAI , the acquisition comes at a time when the company wants to stay ahead in the generative AI race as competitors like Anthropic, Google, and Elon Musk’s xAI are also investing heavily in upgrades and rolling out new products.
Part of staying ahead of the competition includes expanding and enhancing hardware operations. To boost its hardware aspirations, OpenAI hired the former head of Meta’s Orion augmented glasses initiative in November last year to head its robotics and consumer hardware efforts.
But staying ahead of the competition goes beyond the hardware business, as the tech firms also jostle to get the best researchers in the sector.
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