In one of the most headline-grabbing tech deals of 2025, OpenAI has acquired the AI hardware startup founded by legendary designer Jony Ive in a deal valued at $6.5 billion. This acquisition marks not just a significant financial commitment, but also a bold shift in OpenAI’s roadmap—from being solely a software and API powerhouse to exploring tangible, physical consumer devices. The acquisition represents a merging of cutting-edge artificial intelligence and revolutionary design, a marriage that could reshape the way humans interact with machines in the years to come.
This article explores every aspect of the acquisition: the origin of the partnership, the financial details of the deal, the players involved, what it means for the future of AI hardware, and how it positions OpenAI in the broader tech ecosystem.
The Origin of the Collaboration
The seeds of this acquisition were planted nearly two years ago, when OpenAI CEO Sam Altman reached out to Jony Ive, the former Chief Design Officer at Apple. Ive, known for being the creative force behind the iPhone, iPad, iMac, and Apple Watch, had left Apple in 2019 to found his own design firm, LoveFrom. While LoveFrom maintained a high level of secrecy around its projects, it was known to be exploring new forms of consumer hardware—and AI was a growing focus.
Sam Altman and Jony Ive reportedly shared a mutual vision: to create a new kind of device that didn’t merely support artificial intelligence, but was designed from the ground up for it. They imagined something beyond the smartphone—something that would leverage natural language interfaces, contextual awareness, and real-time computing in a form factor that was both elegant and seamless. Their collaboration led to the formation of a new venture, known internally as “io,” dedicated to this vision.
What Is io?
“io” was the code name for the hardware startup created by Jony Ive and supported by LoveFrom and OpenAI. While the company operated in stealth mode for much of its development phase, industry insiders revealed that its mission was to build an “AI-native” device—one that wouldn’t rely on a screen or even traditional apps.
Instead, this mysterious product would prioritize voice interaction, presence detection, and adaptive behavior, making it feel less like a gadget and more like an intelligent companion. The team reportedly included many of Jony Ive’s former colleagues from Apple, including engineers and designers who had worked on key Apple hardware. The startup was also supported by significant funding, with OpenAI contributing early investments and guidance.
The Deal: $6.5 Billion and a Vision for the Future
In May 2025, OpenAI officially announced it had acquired io in a deal worth $6.5 billion. The deal was structured as an all-stock transaction, with OpenAI valuing the company not just based on current output, but on the immense potential it holds in redefining hardware and user interfaces.
OpenAI already held a 23% stake in io before the acquisition. With this move, it has absorbed the full company—its employees, intellectual property, and creative leadership. Approximately 55 employees from io, including former Apple engineers, have now joined OpenAI’s hardware division. Jony Ive, while not formally becoming an OpenAI employee, will remain deeply involved in the project through LoveFrom, which will lead design for the new product line.
Why OpenAI is Moving Into Hardware
Until now, OpenAI has been best known for developing large language models like GPT-4 and GPT-5, as well as conversational AI platforms like ChatGPT. These models have primarily existed in the cloud, accessed via web interfaces or integrated into third-party applications. However, OpenAI’s leadership has been vocal about the limitations of this approach.
They argue that for AI to become truly integrated into people’s lives, it must be embedded into purpose-built hardware. Rather than merely enhancing existing devices like phones or laptops, AI should inspire entirely new kinds of tools—ones that are as intuitive and seamless as using natural language.
This line of thinking reflects a belief that the future of AI lies not just in software but in ambient computing: AI that is always present, always listening, and always ready to assist. By acquiring io and partnering with Jony Ive, OpenAI is taking a massive step toward making that vision a reality.
What Kind of Device Are They Building?
Though OpenAI and LoveFrom have been secretive about the exact details of their first product, sources close to the company have revealed some tantalizing hints.
The device is expected to be a pocket-sized, screen-free companion that uses advanced AI to engage users in real-time conversations, understand context, and provide assistance. It may resemble a high-end voice assistant but with much deeper capabilities. It’s not a phone, not a smartwatch, and not augmented reality glasses. Instead, it could be something entirely new.
This product could recognize who you are, where you are, and what you’re trying to do. It may use sensors, microphones, and contextual AI to adapt its behavior dynamically, offering personalized insights, reminders, or suggestions as you move through your day. Think of it as a “personal AI concierge” that quietly shadows you, anticipating your needs and responding naturally.
The goal is to launch this device as early as 2026.
Jony Ive’s Return to Spotlight
Jony Ive’s legacy at Apple is almost mythical. From the colorful iMac to the sleek iPhone and minimalist Apple Watch, he shaped the aesthetic of modern consumer electronics. Since leaving Apple, he has worked with a variety of organizations through LoveFrom, including Airbnb and Ferrari. But this project with OpenAI marks his most high-profile initiative since departing Apple.
Ive’s design philosophy is grounded in elegance, minimalism, and functionality. He is known for obsessing over every curve, material, and sound a product makes. Bringing that sensibility to AI could result in a product unlike anything we’ve seen before—a device that feels more like an extension of your personality than a piece of tech.
Ive has stated that his interest in this project is deeply personal. He sees an opportunity to reimagine how humans interact with machines at the most fundamental level. And with AI evolving rapidly, now is the perfect moment to rethink hardware from the ground up.
Competitive Landscape and Industry Impact
The OpenAI-io merger is sending shockwaves through the tech industry. It signals OpenAI’s transition from a software-only company to one that will compete in the physical device market. That brings it into direct competition with tech giants like Apple, Google, Amazon, and Meta—all of which are developing or selling hardware designed around AI and voice interaction.
The announcement has also raised concerns within Apple, where some insiders reportedly feel that Ive’s new AI device could rival the iPhone in innovation. Investors took notice, too. In the days following the announcement, Apple’s stock dipped, with analysts speculating that the company was falling behind in AI consumer tech.
Meanwhile, Meta and Google are investing heavily in augmented and virtual reality, betting that immersive visual computing will define the future. OpenAI, in contrast, appears to be focusing on non-visual, audio-first computing—an area with less friction and a more universal user base.
This divergence in approach underscores a broader debate in the tech world: Will the next big thing be something you wear on your face—or something you carry in your pocket and talk to like a friend?
Challenges Ahead
Despite the excitement surrounding the acquisition, there are major hurdles ahead. First and foremost, building consumer hardware is incredibly difficult. It requires supply chain management, manufacturing, distribution, customer support, and retail strategies—all areas where OpenAI has little to no experience.
Moreover, hardware is capital-intensive and slow-moving. Unlike software updates that can be pushed overnight, hardware takes years to design, test, and produce. There’s also the challenge of creating a user experience that feels magical—one that lives up to both Ive’s design standards and OpenAI’s intelligence benchmarks.
Finally, there are privacy concerns. A context-aware AI device that’s always listening and collecting data will need to offer airtight privacy guarantees. Consumers are increasingly skeptical of surveillance devices, and OpenAI will have to walk a fine line between usefulness and invasiveness.
Frequently Asked Question
What company did OpenAI acquire?
OpenAI acquired a hardware startup founded by Jony Ive, known internally as io. The company was developing next-generation AI-native hardware devices.
How much was the acquisition worth?
The acquisition was valued at $6.5 billion in an all-stock deal. OpenAI already owned 23% of the startup before acquiring the rest.
Who is Jony Ive and why is this important?
Jony Ive is the former Chief Design Officer at Apple and is known for designing iconic products like the iPhone, iPad, and MacBook. His design vision is considered revolutionary, making his partnership with OpenAI a major event in tech.
What will Jony Ive’s role be after the acquisition?
Jony Ive will not become a formal employee at OpenAI. Instead, his design firm, LoveFrom, will lead the creative and design efforts for OpenAI’s new hardware products.
What is the goal of the acquisition?
The main goal is to create AI-native consumer hardware—devices designed specifically to harness the power of artificial intelligence, rather than retrofit AI into traditional devices like smartphones or smart speakers.
What kind of product are they building?
The first device is rumored to be a screen-free, pocket-sized AI assistant, not a phone or wearable. It will focus on voice interaction, context awareness, and personal assistance—offering a new way for users to interact with AI.
When will the device launch?
While no official date has been confirmed, reports suggest that the first product could launch in 2026.
How many employees joined OpenAI through the acquisition?
Approximately 55 employees, including many former Apple engineers, joined OpenAI from the acquired startup.
Why is OpenAI moving into hardware?
OpenAI believes that for artificial intelligence to become truly useful and integrated into daily life, it needs to live in dedicated hardware designed specifically for AI interaction—not just apps or web interfaces.
Conclusion
The $6.5 billion acquisition of Jony Ive’s AI startup represents more than just a financial transaction. It’s a bet on the future—a belief that AI should not just live in the cloud, but in our pockets, on our desks, and beside our beds. It’s about creating an experience that is not only intelligent but also beautiful, personal, and deeply human.
