AI giant partners with iconic Apple designer to build a new category of intelligent devices set to reshape human-tech interaction- OpenAI and Jony Ive join forces to build the future of AI hardware.
In a landmark deal that could redefine the future of technology, OpenAI is acquiring io — a secretive AI hardware startup co-founded by Apple design legend Jony Ive — in an all-stock transaction valued at nearly $6.5 billion. The acquisition not only marks OpenAI’s largest deal to date but also signals its ambitious entry into the hardware world, aiming to revolutionize the consumer tech landscape.
With this move, OpenAI will gain direct access to a world-class team of approximately 55 engineers, designers, and manufacturing experts — many of whom helped create Apple’s most iconic products, including the iPhone, iPad, and Apple Watch. The deal includes $5 billion in equity and incorporates an earlier agreement that gave OpenAI a 23% stake in io.
Jony Ive, widely regarded as one of the most influential industrial designers in modern history, returns to center stage in consumer tech. “I have a growing sense that everything I’ve learned over the last 30 years has led me to this place and to this moment,” Ive said in a joint interview with OpenAI CEO Sam Altman. He described Altman as a “rare visionary,” and Altman reciprocated by calling Ive “the spiritual successor to Steve Jobs.”
The Next Frontier: AI-First Devices
This partnership signifies OpenAI’s belief that AI has matured beyond just software. Altman noted, “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.”
Ive and Altman have already been quietly collaborating on hardware ideas for nearly two years, and the result will be a product line that aims to be as revolutionary as the iPhone once was. Their first device, expected to debut in 2026, is designed not to replace the smartphone but to introduce a new paradigm of AI-powered interaction.
“The phone, as it currently is, is a remarkable general-purpose device,” said Ive. “But people are ready for something new. There’s an unease with where we are.” Altman emphasized that this isn’t about killing the smartphone. “In the same way that the smartphone didn’t make the laptop go away, our first thing isn’t going to make the smartphone go away,” he explained. “It’s a totally new kind of thing.”
Strategic Impact and Industry Implications
The implications of this deal reach far beyond OpenAI’s walls. It represents a bold challenge to Apple, which has been lagging behind in the AI race. Apple’s own AI platform, launched in 2024, lacks the sophistication of competing systems and even relies partly on OpenAI’s ChatGPT to close the gap.
Apple’s stock dropped as much as 2.3% following news of the acquisition, reflecting investor concern about Apple’s position in the rapidly evolving AI space. For Apple, losing not only a former top designer but also watching him now collaborate with their main AI partner underscores the mounting competitive pressures.
A Star-Studded Team with Deep Apple Roots
Founded in 2024, io was co-created by a dream team of Apple alumni: Scott Cannon, Evans Hankey, and Tang Tan. Hankey succeeded Ive at Apple and left the company in 2023. Tan led design for the iPhone and Apple Watch until 2024. Cannon, who also previously worked at Apple, co-created the Mailbox app, which was later acquired by Dropbox.
This collective, now part of OpenAI, will remain based in San Francisco’s Jackson Square, working alongside OpenAI’s teams. Peter Welinder, OpenAI’s current product VP, will oversee the hardware division, ensuring a seamless integration of software intelligence with next-gen device design.
LoveFrom’s Continued Influence
While io becomes a formal part of OpenAI, Ive’s design firm, LoveFrom, will remain independent. Yet its role will be pivotal — LoveFrom will now guide the design direction of all OpenAI products, both hardware and software. This includes a planned redesign of the ChatGPT interface, which Altman admits is still “in the terminal phase” of user experience evolution.
LoveFrom’s elite design corps includes names like Bas Ording, Mike Matas, and Chris Wilson — all key contributors to the visual language of Apple’s macOS and iOS. Though LoveFrom will retain relationships with clients like Ferrari and Airbnb, it will no longer seek new major accounts as it shifts focus toward shaping the future of AI-infused design.
The Vision Ahead
The collaboration is not just about better design — it’s about rethinking what devices can be in an age of artificial general intelligence (AGI). “This is probably the most incredible technology of our careers,” said Hankey, reflecting on ChatGPT’s arrival and the wake-up call it gave the io team.
Their collective goal is to create a new category of AI-native devices that feel as intuitive and revolutionary as Apple’s original products. “It will be worth the wait,” Altman said, acknowledging the long development timeline. “It’s a crazy, ambitious thing to make.”
Industry Reactions and Competitor Landscape
The market for AI devices is still nascent and riddled with false starts. Products like the Humane AI Pin and Rabbit r1 have failed to impress, and Meta’s smart glasses, while innovative, have not yet proven to be game-changers.
“There has been an absence of new ways of thinking expressed in products,” Ive noted, hinting that their forthcoming devices will break the mold. With no legacy to constrain them, Altman and Ive see a unique opportunity to reinvent how we interact with intelligent machines.
A New Chapter for OpenAI
From a research lab to an AI juggernaut with a $300 billion valuation, OpenAI is now writing its next chapter. Its leadership team recently added Instacart CEO Fidji Simo as the head of applications, freeing Altman to focus on long-term vision.
Simultaneously, OpenAI is pursuing other deals, including a $3 billion acquisition of AI coding platform Windsurf. But the io acquisition stands out for its potential to define how humans will engage with AI for decades to come.
As Jony Ive puts it, “I have felt that my most important and useful work is ahead. I’ve been training for this moment.”
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