OpenAI and former Apple design chief Jony Ive have announced a major partnership that will see OpenAI acquire Ive’s hardware startup io in an all-stock deal valued at nearly $6.5 billion. The acquisition marks OpenAI’s largest purchase to date and signals the company’s serious ambitions to enter the hardware space.
According to a joint statement from OpenAI CEO Sam Altman and Ive, the two have been quietly collaborating for the past two years. Their partnership aims to develop a new generation of AI-powered devices that move beyond traditional screens and interfaces, with the first products expected to launch in 2026.
“I have a growing sense that everything I have learned over the last 30 years has led me to this moment,” Ive said in the statement. Altman added that he hopes to “bring some of the delight, wonder and creative spirit that I first felt using an Apple Computer 30 years ago.”
The deal structure
The acquisition includes OpenAI’s earlier investment from late 2024, when it purchased a 23% stake in io. As part of the current arrangement, io’s team of approximately 55 engineers, scientists, researchers, and product development specialists will join OpenAI. Meanwhile, Ive’s design firm LoveFrom will remain independent but will take on extensive design responsibilities across OpenAI’s products and services.
Ive co-founded io last year with other Apple alumni, including Evans Hankey (Ive’s successor at Apple who left in 2023), Tang Tan (former iPhone and Apple Watch product design leader), and Scott Cannon. The company was backed by investors including Laurene Powell Jobs’ Emerson Collective, Sutter Hill Ventures, Thrive Capital, Maverick Capital, and SV Angel.
Impact on OpenAI and the tech industry
This acquisition represents a significant strategic shift for OpenAI, which until now has primarily focused on developing AI software and services like ChatGPT. With io’s hardware expertise, OpenAI is positioning itself to compete directly with established device manufacturers, potentially including Apple.
The move comes as OpenAI has been reorganizing its leadership structure. Earlier this month, the company appointed former Instacart chief Fidji Simo as CEO of applications, reporting to Altman, who will now focus more on broader strategy.
Industry analysts view the acquisition as particularly significant given Ive’s legendary status in the tech world. As Apple’s chief design officer for nearly three decades, Ive was instrumental in creating iconic products like the iPhone, iPad, and Apple Watch, working closely with Steve Jobs to establish Apple’s distinctive design language.
Vision for future products
While specific details about upcoming products remain scarce, both Altman and Ive emphasized that they aim to create entirely new types of devices rather than simply iterations of existing technology.
“AI is such a big leap forward in terms of what people can do that it needs a new kind of computing form factor to get the maximum potential out of it,” Altman told Bloomberg in an interview.
Ive added that their work addresses “an unease with where we currently are” regarding today’s technology products. The executives clarified that they don’t see their devices immediately replacing smartphones but rather creating a new category of products that will change how people interact with AI.
The acquisition is expected to close this summer, pending regulatory approval. OpenAI stated that the io team will continue working at their existing space in San Francisco’s Jackson Square neighborhood, as well as at OpenAI’s offices.
Sources: OpenAI, Wall Street Journal, Bloomberg