OpenAI to buy iPhone designer Jony Ive's startup for $6.5 billion. Here's what it means for S.F.
OpenAI CEO Sam Altman and famed Apple designer Jony Ive have joined forces to build the 'iPhone of AI,' with OpenAI agreeing to buy Ive's new startup Io for $6.5 billion. The purchase would be OpenAI's biggest deal ever, uniting two of the most prominent names in tech and giving San Francisco another economic win in the nascent industry.
The team will create a 'new family of products' for artificial intelligence, Altman and Ive said in a joint statement Wednesday. The deal is subject to regulatory approval.
Ive, who left Apple in 2019, and his San Francisco design studio LoveFrom began working with Altman two years ago. Altman has been frequently seen in the city's Jackson Square neighborhood where LoveFrom's headquarters is located.
'A collaboration built upon friendship, curiosity and shared values quickly grew in ambition. Tentative ideas and explorations evolved into tangible designs,' the statement said. Io was co-founded by Scott Cannon, Evans Hankey and Tang Tan. Ive and his team 'will assume deep design and creative responsibilities across OpenAI.'
Ive declined further comment on the deal.
The startup employs 55 people, who will all become OpenAI employees, but will remain based in Jackson Square. Io is located in that neighborhood, close to LoveFrom's headquarters, in a building Ive purchased, the Chronicle has learned.
Ive's multi million dollar purchases of a string of adjacent aging buildings centered around the 800 block of Montgomery Street in the ritzy Jackson Square neighborhood have made headlines in recent years. He has launched an extensive renovation effort to revitalize them as LoveFrom's home base, which is ongoing.
Altman has also made major real estate moves. He leased close to 1 million square feet across three separate buildings in the city's Mission Bay neighborhood where he moved OpenAI.
'Jony Ive and OpenAI's partnership is a big vote of confidence in San Francisco,' Mayor Daniel Lurie said in a social media post. 'Our city has a strong history of creativity and innovation, a legacy that is alive and well today. This is the place to create the future.'
Sarah Dennis Phillips, executive director of the city's Office of Economic and Workforce Development, said that the deal between Altman and Ive "perfectly illustrates what San Francisco is — a unique ecosystem where ambitious ideas are discussed, challenged, tested and formed into action."
"San Francisco has been Jony Ive's creative home. San Francisco birthed OpenAI and supported Sam Altman's ongoing innovation," she said. "It's where these incredible individuals, their creativity and their innovation can crash together to create something new."
The Emerson Collective, a social change organization founded by philanthropist and entrepreneur Laurene Powell Jobs, and Thrive Capital, a venture capital firm led by Joshua Kushner — the brother of President Trump's son-in-law Jared Kushner — have been confirmed as investors in Io.
Sources have confirmed to the Chronicle that Powell Jobs has also purchased real estate in Jackson Square. The Chronicle reported last year that Thrive Capital paid roughly $9 million for 451 Pacific Ave., a near century old brick-and-timber office building that is located a block over from LoveFrom's headquarters.
"Jackson Square, where this collaboration is taking shape, has quietly become a magnet for visionary creators," said Claude Imbault, vice president of Planning and Economic Development for placemaking organization Downtown SF Partnership. "It's both the birthplace of modern San Francisco and a hub for building the future."
Sources with insight into OpenAI's acquisition of Ive's startup said that more hires are likely and that Ive's team is 'doubling down' on San Francisco.
In a video featuring Altman and Ive walking past sweeping views of San Francisco's Transamerica Pyramid and a foggy Golden Gate Bridge, the two men lauded each other — Ive crediting Altman for 'humility' and Altman calling Ive the 'deepest thinker.' They meet at Cafe Zoetrope in North Beach.
'San Francisco has been like a mythical place in American history,' said Altman. 'It is the city I most associate with the sort of leading edge of culture and technology.'
The video feels like a love letter to San Francisco.
'This city has enabled and been the place of the creation of so much,' said Ive. 'I feel I owe this city such an enormous debt of gratitude.'
'This is another success story for San Francisco. This shows that we continue to be the best place in the world to bring world-changing ideas to life,' said Supervisor Danny Sauter, who represents Jackson Square. He said that Ive and his company 'have been positive partners in the neighborhood with open and transparent communication and we hope and expect that to continue.'
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