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In a move set to redefine the intersection of artificial intelligence and consumer electronics, OpenAI has announced the acquisition of io, an AI-focused hardware startup co-founded by legendary Apple designer Jony Ive. Valued at nearly \$6.5 billion, this all-stock deal is not only the largest in OpenAI’s history but also a bold declaration of its ambition to revolutionize how humans interact with AI-powered technology.
This strategic union blends OpenAI’s world-leading software capabilities with Ive’s unmatched legacy in hardware innovation, creating a dream team with eyes set on shaping the future of AI devices. With a team of former Apple engineers and designers, the newly formed hardware division will craft a next-generation family of AI-native products—ones that aim to do what the iPhone did in the early 2000s.
A New Era in AI-Driven Hardware: The Highlights
OpenAI has confirmed it will acquire io, the AI hardware startup created by former Apple design chief Jony Ive, in an all-stock transaction valued at nearly \$6.5 billion. This acquisition signals OpenAI’s serious intention to enter the hardware space with purpose-built devices optimized for AI interaction.
Jony Ive, once described by Steve Jobs as his “spiritual partner,” played a critical role in designing iconic Apple products such as the iPhone, iPod, and MacBook. His return to consumer tech comes five years after leaving Apple to launch his design firm LoveFrom. Now, he’s partnering with OpenAI CEO Sam Altman, who praised him as a “rare visionary.”
The acquisition brings together approximately 55 experts in hardware, software, and manufacturing. The team is expected to work under the OpenAI umbrella while maintaining ties to LoveFrom, which will now design both software and hardware interfaces for the company.
OpenAI’s move not only challenges Apple, which has fallen behind competitors in the AI race, but also sets the stage for a completely new kind of computing device. Altman mentioned that current hardware doesn’t fully support AI’s potential, implying that the team will invent entirely new form factors.
The first product from this partnership is expected to debut in 2026, and although details remain under wraps, the duo teased it will be a category-defining innovation—likely not a smartphone replacement but something radically different. The ambition is to redefine human-computer interaction, beyond what the iPhone or laptop ever did.
Investors backing io include Laurene Powell Jobs’ Emerson Collective, Thrive Capital, and Sutter Hill Ventures. Altman himself does not hold equity in the startup.
Interestingly, while Apple promised ongoing collaboration with Ive after his departure, nothing materialized. Now, the designer who once defined Apple’s identity is working to shape its competition.
The deal also includes
The newly formed team will work from io’s San Francisco headquarters and OpenAI offices. Their mission is bold: to craft a generation of AI-native hardware devices, grounded in functionality, elegance, and forward-thinking design.
OpenAI, now valued at \$300 billion, continues to pursue expansion strategies including talks for a \$3 billion acquisition of coding software startup Windsurf. Meanwhile, new executive appointments like Fidji Simo (formerly of Instacart) hint at a strong focus on product applications.
Altman believes they’re still far from perfecting how humans interact with AI. But with Ive on board, OpenAI is now equipped to explore that frontier—creatively and functionally.
What Undercode Say:
The acquisition of io marks a transformative moment not just for OpenAI, but for the broader technology landscape. This is more than a simple merger—it’s a statement of intent.
Jony Ive is not just another talented designer; he’s the architect of a design philosophy that has influenced billions of devices globally. His pivot to AI hardware design implies that the next generation of smart devices won’t merely be iterative improvements—they’ll be fundamental reinventions. OpenAI is betting that consumer interfaces need to be rebuilt from scratch if we’re to unlock AI’s full potential.
In the last few years, AI innovation has been largely software-led. Devices like smartphones, laptops, or smart speakers weren’t made with AI at their core. They were built for connectivity, content consumption, and portability. Altman and Ive are trying to reverse-engineer the experience—starting with the AI, and then asking: what kind of device does this intelligence deserve?
This strategy mirrors Apple’s disruptive product cycles of the past. But here, it’s not about creating the next iPhone—it’s about moving beyond it. AI-native hardware must solve problems we haven’t fully articulated yet, blending deep learning with user-centered design.
The \$6.5 billion price tag isn’t just about talent or IP—it’s about speed and vision. OpenAI is investing in a shortcut to Apple-level hardware elegance and usability, something that would have taken them years to develop independently.
Moreover, this puts serious pressure on Apple, which has yet to deliver a compelling AI product suite. With OpenAI now owning a dream team of Apple alums, the innovation spotlight may shift toward San Francisco’s Jackson Square rather than Cupertino.
This development also opens the door for ecosystem integration. Imagine AI-native wearables, ambient computing devices, or neural input tools developed with the grace of an iPod but powered by GPT-level intelligence. It’s not science fiction anymore—it’s a business strategy.
The question now is whether this partnership can actually deliver on its sky-high ambitions. Previous AI hardware efforts—like the Humane Ai Pin or Rabbit r1—failed due to weak execution and lack of relevance. But with OpenAI’s models and Ive’s design pedigree, they have the potential to break that cycle.
It’s not just about creating devices—it’s about changing behaviors. How do people interact with machines that understand context, emotion, and intention? That’s the question Ive and Altman are chasing.
They won’t answer it overnight. But if their first product becomes a new benchmark, we could witness a paradigm shift in how hardware and AI coexist. And that might just put OpenAI in a position to challenge even Apple on its own turf.
Fact Checker Results ✅
The \$6.5B valuation is accurate and backed by multiple major tech investment sources.
Jony Ive’s involvement and his founding role in io are verified.
Apple’s AI gap, compared to OpenAI’s rapid progress, has been documented in tech reports.
Prediction 🔮
OpenAI’s move into hardware will spark a new wave of AI-native device development by major players like Google, Meta, and Apple. Within five years, consumer tech could be dominated by AI-first interfaces, and the first product from this partnership—expected in 2026—may define a new category of devices, much like the iPhone once did for smartphones.
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