OpenAI is acquiring io, a hardware startup co-founded by Apple (AAPL) design legend Jony Ive, in a deal valued at approximately $6.5 billion, the company announced Wednesday.
The all-stock transaction is OpenAI’s largest acquisition to date — and a major signal that OpenAI is moving aggressively beyond software and into the business of building physical devices powered by artificial intelligence.
The deal brings OpenAI the full capabilities of io’s team, which includes 50-plus hardware engineers and designers, many of whom previously worked on products such as the iPhone, Apple Watch, and iPad. With the acquisition, OpenAI now has a dedicated hardware division, positioning it to create consumer-facing AI-native devices that could redefine how people interact with technology.
Apple shares fell 1.8% following the news. Meanwhile, the ChatGPT-maker has rapidly evolved from a research-focused lab into one of the most valuable private companies in the world, with a current valuation of $300 billion.
While details of the products remain under wraps, reports from The Wall Street Journal suggest that OpenAI CEO Sam Altman and Ive’s design firm, LoveFrom, have spent the past two years secretly developing a device “that will move consumers beyond screens.” Possibilities include: screenless devices, wearable AIs, and camera-based context-aware assistants.
“This is a totally new kind of thing,” Altman told Bloomberg of the products the companies are working on, which are expected to launch in 2026.
He added in the interview that “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 described the project to Bloomberg as an effort to deliver a benchmark in quality and innovation — “a level that has never happened before.” According to the OpenAI CEO, unlocking AI’s full potential will require “a new kind of computing form factor.”
Ive, widely credited for shaping modern consumer technology, said in a statement that he has “a growing sense that everything I’ve learned over the last 30 years has led me to this place and to this moment.”
Altman added: “AI is an incredible technology, but great tools require work at the intersection of technology, design, and understanding people and the world. No one can do this like Jony and his team. What it means to use technology can change in a profound way.”
Ive’s return to consumer tech in partnership with OpenAI comes amid intensifying pressure on Apple to deliver compelling advances in artificial intelligence. While Apple and OpenAI have recently collaborated — including integrating ChatGPT into Siri and Apple’s system-wide writing tools — the acquisition of io suggests that OpenAI may soon compete more directly with Apple in defining the next generation of consumer tech.
“This is a crazy, ambitious thing to make,” Altman told Bloomberg. “It will be worth the wait.”
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