OpenAI unites with Jony Ive in US$6.5bil deal to create AI devices

The Star

22-05-2025

SAN FRANCISCO: The rise of artificial intelligence has profoundly altered the technology world in recent years, upending how software is created, how people search for information, and how images and videos can be generated – all with a few prompts to a chatbot.
What the technology has yet to do, though, is find a preferred form in a physical, everyday gadget. AI largely remains the domain of an app on phones, despite efforts by startups and others to move it into devices.
Now OpenAI, the world's leading AI lab, is taking a crack at that riddle.
On Wednesday, Sam Altman, OpenAI's CEO, said the company was paying US$6.5bil (RM27.71bil) to buy io, a one-year-old startup created by Jony Ive, a former top Apple executive who designed the iPhone.
The deal, which effectively unites Silicon Valley royalty, is intended to usher in what the two men call 'a new family of products' for the age of artificial general intelligence, or AGI, which is shorthand for a future technology that achieves human-level intelligence.
The deal, which is OpenAI's biggest acquisition, will bring in Ive and his team of about 55 engineers, designers and researchers. They will assume creative and design responsibilities across OpenAI and build hardware that helps people better interact with the technology.
In a joint interview, Ive and Altman declined to say what such devices could look like and how they might work, but they said they hoped to share details next year. Ive, 58, framed the ambitions as galactic, with the aim of creating 'amazing products that elevate humanity'.
'We've been waiting for the next big thing for 20 years,' Altman, 40, added. 'We want to bring people something beyond the legacy products we've been using for so long.'
Altman and Ive are effectively looking beyond an era of smartphones, which have been people's signature personal device since the iPhone debuted in 2007. If the two men succeed – and it is a very big if – they could spur what is known as 'ambient computing'. Rather than typing and taking photographs on smartphones, future devices like pendants or glasses that use AI could process the world in real-time, fielding questions and analysing images and sounds in seamless ways.
The Humane A.I. Pin in San Francisco, April 1, 2024. Sam Altman, OpenAI's chief executive, previously invested in Humane. — Andri Tambunan/The New York Times
Altman had invested in Humane, a company that pursued this kind of vision with the creation of an AI pin. But the startup folded not long after its product flopped.
In their interview, Ive expressed some misgivings with the iPhone and said that had motivated him to team up with Altman.
'I shoulder a lot of the responsibility for what these things have brought us,' he said, referring to the anxiety and distractions that come with being constantly connected to the computer in your pocket.
Altman echoed the sentiment. 'I don't feel good about my relationship with technology right now,' he said. 'It feels a lot like being jostled on a crowded street in New York, or being bombarded with notifications and flashing lights in Las Vegas.' He said the goal was to leverage AI to help people make some sense of the noise.
Ive, a former top Apple executive who designed the iPhone and is the founder of the tech startup io, said that the goal with OpenAI was to create 'amazing products that elevate humanity'. — Carolyn Fong/The New York Times
As part of the deal, Ive and his design studio, LoveFrom, will remain independent and continue to work on projects separate from OpenAI. Scott Cannon, Evans Hankey and Tang Tan, who also founded io with Ive, will become OpenAI's employees and report to Peter Welinder, a vice president of product, who will oversee the io division. The acquisition is a significant windfall for Ive.
OpenAI and LoveFrom declined to disclose financial specifics, including whether the US$6.5bil (RM27.71bil) deal would be paid in cash or stock. The deal is subject to regulatory approval.
OpenAI already owned a 23% stake in io as part of an agreement between the two companies at the end of last year, two people with knowledge of the deal said, so it is now paying around $5 billion to fully acquire the startup. OpenAI separately has a Startup Fund that invested in Ive's startup last year, the people said.
( The New York Times has sued OpenAI and its partner, Microsoft, for copyright infringement regarding news content related to AI systems. OpenAI and Microsoft have denied the claims.)
OpenAI set off the AI boom in late 2022 when it released the ChatGPT chatbot. In March, the startup completed a US$40bil (RM170.50bil) funding that valued it at US$300bil (RM 1.27 trillion) , making it one of the world's most valuable private companies. The fundraising round was led by the Japanese conglomerate SoftBank.
As it has grown, OpenAI has struggled to adopt a new corporate structure. Founded in 2015 as a nonprofit organisation, the AI lab has been trying to reinvent itself as a for-profit company so it can more easily raise money from investors. If it does not restructure by the end of the year, SoftBank could halve its investment in the company.
That makes the billions that OpenAI is paying for Ive's startup a steep outlay, especially as the startup is also unprofitable. Building the technology that powers ChatGPT and other services is enormously expensive, and OpenAI is under pressure to raise revenues.
OpenAI expects about US$3.7bil (RM15.77bil) in sales this year and about US$11.6bil (RM49.44bil) next year, according to financial documents reviewed by the Times . The company is also in talks to acquire Windsurf, an AI-powered programming tool, for about US$3bil (RM12.79bil).
Asked how OpenAI would find the money to buy io, Altman said the press worried about OpenAI's funding and revenues more than the company did.
'We'll be fine,' he said. 'Thanks for the concern.'
The deal came together after Ive, a protege of Apple's founder, Steve Jobs, who designed the iPod and many other products, became intrigued by AI. He felt somewhat lost after leaving Apple in 2019, he said, and was eager to find his next act.
Two years ago, Charlie Ive, one of his 21-year-old twin sons, told him about ChatGPT, Ive said. Curious about his son's excitement over the chatbot, Ive connected with Altman. They became friends.
Ive said he was so enamored with the technology that he founded io last year with several peers to conceptualise new hardware products suited to AI. By early this year, it became clear that he and Altman wanted to form a partnership to work on a new generation of devices, he said.
Ive said the partnership was not being led by a fiscal imperative but from a place of building products that 'benefit humanity'.
'I believe everything I've done in my career was leading to this,' he said. – ©2025 The New York Times Company
This article originally appeared in The New York Times.