OpenAI is paying $6.5 billion to acquire io Products, a startup from legendary iPhone designer Jony Ive that bills itself as the creator of the next-generation device to shape how users interact with AI.
Ive and his 50-person team will join OpenAI to design and build hardware for AI interfaces.
“What it means to use technology can change in a profound way. I hope we can bring some of the delight, wonder, and creative spirit that I first felt using an Apple computer 30 years ago,” OpenAI CEO Sam Altman said in a statement.
Ive and cofounders Evans Hankey and Tang Tan started io Products one year ago. The startup has been operating out of Ive’s Jackson Square mini-empire. Among the company’s backers are Laurene Powell Jobs’ Emerson Collective, Thrive Capital, and Sutter Hill Ventures.
Altman and Ive have been secretly collaborating for years on devices that will move users past the screens that dominate current consumer hardware, considering headphones and devices with cameras, according to The Wall Street Journal.
LoveFrom, Ive’s design firm based in San Francisco, is not part of the deal and will continue to pursue independent projects. According to the Journal, OpenAI will be a client of LoveFrom, and LoveFrom will receive a stake in OpenAI.
The deal is expected to close in the coming months, pending regulatory approval. The first products from the collaboration are expected to be released in 2026, according to Bloomberg.
A nine-minute video released in conjunction with the acquisition announcement featured Ive and Altman fawning over each other in Cafe Zoetrope.
LoveFrom was described by Altman as the “densest collection of talent that I’ve ever heard of in one place and probably has ever existed in the world.” While Ive characterized Altman as “a rare visionary” who “shoulders incredible responsibility.”
The clip was light on specifics about the actual devices being designed, but it detailed the duo’s relationship and their love of San Francisco, which was called “a mythical place in American history” by Altman.
Several AI-based devices have been spun up in the past few years, including smart glasses and AI-enabled pins. But none have seen widespread adoption.
This could change with the new deal, which brings together the ChatGPT maker and a man partly responsible for ushering in the smartphone revolution during his nearly three-decade tenure at Apple. Ive left the tech giant in 2019.
Last year, OpenAI struck a deal to integrate its technology with Apple’s smartphones via Apple Intelligence software.
According to The New York Times, OpenAI was already an investor in io Products and owned a 23% stake. The new deal makes OpenAI — recently valued at $300 billion — the sole owner of Ive’s startup.
Additionally, OpenAI this month announced that it is purchasing the AI-assisted coding tool Windsurf for $3 billion.
Ive told The New York Times he was disillusioned by the iPhone’s impact on users’ attention and anxiety, and this was part of his motivation for teaming up with Altman and OpenAI.
“I shoulder a lot of the responsibility for what these things have brought us,” he said.
That said, Altman told Bloomberg he doesn’t think the initial product releases from OpenAI will immediately be smartphone killers.
“In the same way that the smartphone didn’t make the laptop go away, I don’t think our first thing is going to make the smartphone go away,” Altman said. “It is a totally new kind of thing.”