Sam Altman's $6.4 billion bet on Jony Ive has Zuckerberg-like qualities
OpenAI on Wednesday said it's buying Ive's nascent devices startup io in what is by far the largest acquisition in the artificial intelligence company's 10-year history. It's a decidedly big bet on a secretive hardware company co-founded by Ive, who famously designed Apple's iconic iPhone, iPod and iPad.
In a post on X alongside a nine-minute video with Ive, Altman called his new colleague "the greatest designer in the world."
The all-stock deal represents a staggering sum, particularly at a time when venture firms have been thirsty for exits due to a yearslong dearth of IPOs and big acquisitions. For OpenAI, the purchase represents just over 2% of its paper worth after the company was valued at $300 billion in a SoftBank-led round in March.
As CEO of the most high-valued tech startup in the U.S. and perhaps the most high-profile private company on the planet, Altman's position in the industry is reminiscent of where Zuckerberg sat 13 years ago, as he was preparing to guide Facebook through what at the time was the largest tech initial public offering ever.
A month before its debut, Facebook announced the acquisition of a 13-person photo-sharing startup with no revenue called Instagram in an effort to gain traction in the fast-growing mobile apps market. The biggest concern investors had about Facebook was its reliance on the web and that wasn't generating "any meaningful revenue from the use of Facebook mobile products," according to its IPO prospectus.
With the Instagram purchase, Zuckerberg said that Facebook wanted to "learn from Instagram's experience to build similar features into our other products."
"This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users," Zuckerberg wrote. "We don't plan on doing many more of these, if any at all."
Less than two years later and with a public stock ticker to his company's name, Zuckerberg went even bigger, spending $19 billion on messaging app WhatsApp, which recorded about $15 million in revenue for the first half of 2014, while losing more than $200 million during that period. But WhatsApp had over 450 million monthly users and was growing at a rate that potentially threatened Facebook.
"If I'm talking a year from now and they have a billion users, I think this is going to be a home run deal," equity analyst Youssef Squali told CNBC's "Squawk on the Street" after the purchase was announced. "That to me is the clear part about this."
WhatsApp reached 2 billion monthly active users in 2020, and that number has since reached 3 billion, Zuckerberg said on the company's first-quarter earnings call in April. In the quarter, Meta's Family of Apps segment, which includes Facebook, Instagram, Messenger, WhatsApp and other services, generated $41.9 billion in revenue, the vast majority of total company sales.
Instagram and WhatsApp have become so integral to the overall business that the Federal Trade Commission claimed in its antitrust suit against Meta that the acquisitions should never have been allowed and have helped the company keep its dominance "to the detriment of competition and users." Meta disputed the FTC's argument and said the market remains competitive. The trial kicked off in April.
A much smaller piece of Meta's business comes from another big wager Zuckerberg made in acquiring Oculus VR for $2 billion in 2014, before the virtual reality headset maker had launched a consumer product. Oculus is now Meta Quest, the hardware centerpiece of the company's Reality Labs unit and its pivot to the metaverse.
While Instagram and WhatsApp are generally lauded as big wins for Zuckerberg, Oculus remains a question mark. Reality Labs is losing billions of dollars a quarter on minimal revenue.
Zuckerberg said on the latest earnings call that "AI glasses have really taken off" and the company sees opportunities to invest in ramping up distribution, indicating that it's still a bet on the future.
Similarly, investors will likely have to wait years before evaluating OpenAI's acquisition of io.
Other than bringing in Ive, it's not exactly clear what Altman is getting. That's because Ive's so-called creative collective called LoveFrom, which generates revenue from its design work for clients like Airbnb and Ferrari, will stay independent, working on projects with OpenAI and other companies.
Altman and Ive wrote in a blog post on Wednesday that io was started a year ago and has "focused on developing products that inspire, power and enable." In joining OpenAI, io will "work more intimately with the research, engineering and product teams in San Francisco," the post said.
Zuckerberg has defied financial logic and skeptics in riding acquisitions to a $1.6 trillion market cap for Meta, a fifteen-fold increase over Facebook's IPO price.
Altman has already defied tradition, taking what was a nonprofit AI lab a decade ago and turning it into a $300 billion private market behemoth. He now has the iPhone designer on his side to try and figure out what comes next.
"Excited to try to create a new generation of AI-powered computers," Altman wrote on X.
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New York Post
an hour ago
- New York Post
Why geopolitical alliance between the US and India is on ice
President Trump's announcement of sweeping new tariffs on India, totaling 50%, should dispel illusions that the US–India relationship is a warm alliance of like-minded democracies. The move marks a sharp escalation in what is now openly a trade war. Trump cited India's ongoing imports of discounted Russian oil, accusing New Delhi of helping fund Moscow's war machine and selling refined Russian crude on the open market for profit. India responded sharply, hinting at retaliation. Yet Trump pressed on: The first 25% tariff takes effect this week, with another 25% kicking in later this month. This is one of the harshest tariff regimes the US has ever imposed on a major trading partner — and it's aimed at a country Washington claims to view as a key ally. 5 President Trump's announcement of sweeping new tariffs on India, totaling 50%, should dispel illusions that the US–India relationship is a warm alliance of like-minded democracies. Trump is seen here with Indian Prime Minister Narendra Modi. REUTERS On paper, India looks like the perfect partner. It's the world's most populous democracy, largely English-speaking, and deeply embedded in the US economy. Bilateral trade in goods and services hit $212 billion in 2024, with the US trade deficit at about $46 billion. India serves as a key manufacturing hub for pharmaceuticals, apparel and tech. The US sees India as a counterweight to China in the Indo-Pacific. But India doesn't see the relationship through sentimental eyes. Since the Cold War, New Delhi has pursued a doctrine of non-alignment, which has evolved into strategic autonomy. It joins US-led forums like the Quad — in which, alongside Japan and Australia, they aim to promote a free and open Indo-Pacific without demanding formal allegiance. But India is also a member of the BRICS group of developing nations and the Shanghai Cooperation Organization. It buys weapons from the US and France, but also Russia, maintaining friendly ties with Iran and boycotting no one. 5 Russia is a long-time defense partner and energy supplier. India now imports more than a third of its oil from Russia, totaling over $50 billion annually — which is a huge spike since 2021. Modi is seen here with Russia's President Vladimir Putin. AP That instinct is rooted in deep historical memory. Colonized by Britain and sidelined by US Cold War support for Pakistan, India emerged with a fierce desire to avoid foreign dependency. Especially under the nationalist Prime Minister Narendra Modi, it sees itself not as a junior partner in a Western-led order but as a civilizational power asserting its own sovereignty. This helps explain India's refusal to isolate Russia over the Ukraine war. Russia is a long-time defense partner and energy supplier. India now imports more than a third of its oil from Russia, totaling over $50 billion annually — which is a huge spike since 2021, meaning India has taken advantage of Russia's discounts, and which makes it the largest importer of Russian crude ahead of China and Iran. Some of that oil is refined and re-exported to Western markets through a sanctions loophole. It's a lucrative arrangement India has no intention of abandoning — and it keeps Vladimir Putin in business. That's the connection driving events these past few weeks: As Trump has lost faith in Putin's willingness to engage on ending the Ukraine war, so has his impatience with Modi gone through the roof. 5 The US wants India's help in containing China and securing global supply chains. Modi is seen here with China's President Xi Jinping. Getty Images But Trump's response — tariffs as geopolitical punishment — is unusual. Tariffs are typically used to protect domestic industry. Using them to enforce foreign policy aims introduces a different logic. Is it madness? Not entirely. Tariffs are one of the few levers a president can pull unilaterally. But the India case exposes the risks of this approach. India is unlikely to cave. With 1.4 billion people (the most in the world), a $4.2 trillion economy (tied with Japan for fourth in the world) and decent economic growth, it doesn't take kindly to coercion. Worse, this tactic invites charges of hypocrisy. Other countries still trade with Russia in fertilizer, chemicals and refined products. There's also blowback. Tariffs generally raise prices for US consumers, particularly in sectors like generic drugs and clothing. They also threaten to undermine supply chain shifts away from China. Companies like Apple have moved production to India — only to find their new base hit with punitive tariffs. Meanwhile, India may retaliate against US exports in energy and aerospace. 5 The US sees India as a counterweight to China in the Indo-Pacific. But India doesn't see the relationship through sentimental eyes. Carlo – American policymakers of the pre-Trump era spoke of a shared democratic identity and mutual values. But the real relationship is transactional. The US wants India's help in containing China and securing global supply chains. India wants American technology, markets and investment. That's why cooperative efforts like the iCET tech partnership and semiconductor joint ventures may succeed where talk of 'friendship' falls flat. The signs of this can be subtle. For example, Trump has been bragging in recent weeks about having averted war between India and Pakistan earlier this year. Putting aside the likely exaggeration, it did not escape notice in New Delhi that he was placing India — an imperfect but pluralistic democracy — on equal footing with its less-than-democratic rival. For a country deeply conscious of its global standing, this surely reinforced the perception that the Trump administration views India not as a partner of principle, but as just another actor to be cajoled as the situation demands. So it is no surprise that trade negotiations have repeatedly stalled over tariffs and market access. India maintains high barriers on agricultural imports and resists regulatory alignment. The US complains of protectionism; India sees imperialism. Neither is entirely wrong. India's foreign policy is rational, pragmatic, occasionally aggressive and ruthlessly self-interested. Trump's tariffs may sting, but they won't alter that fact. 5 In 1949, President Herbert Hoover met with Indian activist Mahatma Gandhi in New Delhi. Bettmann Archive The discomfort lies in letting go of the fantasy that India is a democratic soulmate. If both sides accept that the relationship is not built on shared values but overlapping interests, then real partnership is still possible. For the likes of Trump and Modi, that's about the best that you can hope for. Dan Perry led Associated Press coverage in Europe, the Middle East, and Africa, and served as AP's special international editor. He publishes Ask Questions Later on Substack.
New York Post
2 hours ago
- New York Post
LI franchisees of Dickey's Barbecue Pit roast chain for money woes in scathing lawsuit: ‘Worst financial decision I ever made'
This place turned out to be a money pit. A national barbecue chain is being taken to court by numerous franchisees for allegedly misleading them with claims of sweet profits that turned out to be all smoke and mirrors — and several New York based investors say they are among those who got their nest eggs roasted. 'It was the worst financial decision I ever made,' said Scott Raifer, of his decision to buy a Dickey's Barbecue Pit franchise and open it in Freeport, Long Island. 3 National barbecue chain Dickey's Barbecue Pit is being taken to court by franchisees over misleading claims. Facebook/Dickey's Barbecue Pit – Freeport Raifer said he is now $500,000 in debt and facing foreclosure on his home after taking out a Small Business Administration loan to open the eatery in December 2020 during the COVID-19 pandemic. It closed in June 2022 — less than two years later. 'I was under the incorrect assumption that we were in business together — if I did well, they did well,' said Raifer, 58, of Plainview. 'I learned that if they did well, it was at the franchisee's expense.' Raifer said he felt pressured by the company to get the location 'up and running' quickly. An estimate from a Dickey's-preferred construction vendor, he said, was 'triple the price' of what he ultimately paid after hiring his own contractors. 'I spent half a million dollars building the place,' said Raifer, who is not part of the lawsuit and has not brought legal action against the company citing lack of resources. Raifer said the $16,000 smoker he bought from a Dickey's-approved vendor repeatedly malfunctioned. When he emailed the company for guidance in January 2021, he said he was reprimanded for including senior executives on the message. 'When I told them that I wanted to sell, they said most of their stores sell for $25,000,' Raifer said. 3 Long Island franchisee Scott Raifer sent an email about the $16,000 smoker he bought from a Dickey's-approved vendor repeatedly malfunctioning, and was reprimanded for including senior executives on the message. Facebook/Dickey's Barbecue Pit – Freeport He said he reached a breaking point when Dickey's headquarters took over his online menu and kept items listed after he had run out, creating confusion for delivery drivers and online customers — a claim the company denies. 'I ended up closing and walking away,' Raifer said. 'Now I owe all this money and I'm losing my house.' Jerry Stephan, another former franchisee, opened a 2,150-square-foot Dickey's location in Centereach, Long Island, in September 2020. A 2018 article on Dickey's corporate website announced that Stephan planned to 'bring 21 locations to New York state.' After paying approximately $20,000 to buy into the franchise, Stephan, a construction contractor, said Dickey's later backed out of the store development deal without explanation. 'They got amnesia and said they weren't allowed to set up the agreement we had legally, so they circumvented that,' Stephan said. 'I was going to build and get a piece of all the other stores. I was planning on that for retirement.' Stephan, who previously owned Long Island's first Quiznos sandwich shop, said the requirement to buy from Dickey's approved vendors and pay marketing fees — which he said yielded little actual promotion — cut into his bottom line. 'I bought stuff through their distributor that was much cheaper elsewhere,' he said. 'Their franchise agreement is ironclad. They've got you by the horns.' Every morning, the NY POSTcast offers a deep dive into the headlines with the Post's signature mix of politics, business, pop culture, true crime and everything in between. Subscribe here! Stephan considered legal action but instead sold his location for 'half' of what he believed it was worth. 'If franchisees budget $500,000 and it costs $800,000 to open, they rack up credit card debt, take second mortgages, and are destined to fail by the time they open,' said Keith Miller, a franchise advocacy consultant. Dozens of Dickey's franchisee's nationwide have filed lawsuits and complaints to the Federal Trade Commission stating the company made false or misleading statements or omitted facts in a prospectus and franchise registration application materials. Some 'pit owners' say they fell so far into debt they closed their shops in less than a year and others owe creditors as much as $1,000,000, according to the New York Times. 3 Dickey's CEO Laura Rea Dickey said Stephan was released from his development deal after failing to meet 'benchmarks' at his store that would have moved him 'beyond being an owner-operator of his own locations.' Instagram/@lauradickeyceo On July 24, the Securities Commissioner within the Maryland Attorney General's office ruled that Dickey's made an improper disclosure by not including contact information for past franchisees on Financial Disclosure Documents in 80 cases. The ruling was separate from the suit. Former franchisees said they were required to pay monthly royalties of 5% and marketing fees of 4% — amounts experts say are on the high end of industry standards. Dickey's said they charge a 'standard 6 percent for royalties and 3% for marketing.' 'Royalties and marketing fees take a nice chunk of your profit,' said Jason Kaplan, CEO of JK Consulting, which advises restaurant owners worldwide. 'The issue becomes making the numbers work without that money.' Raifer, Stephan, and other former operators said they hope speaking out will bring more transparency to the franchise industry. Dickey's CEO Laura Rea Dickey said Stephan was released from his development deal after failing to meet 'benchmarks' at his store that would have allowed him to 'move beyond being an owner-operator of his own locations.' She also mentioned that Raifer's store had received poor online customer feedback and low scores in company audits. Dickey's said it does not collect commissions from the sale of equipment or goods to franchisees. Not all franchisees are unhappy. Gary Mulligan, who owns a Dickey's location in Whiting, New Jersey, said he invested $700,000 in his store and is satisfied with the partnership. 'Dickey's is very responsive to me,' Mulligan said. 'I feel like they're family.'
CNET
3 hours ago
- CNET
This Free Hack Turns Any Old Smartphone Into a Security Camera
Upgrading your phone doesn't have to mean tossing the old one in a drawer. With just a few quick steps, you can repurpose that retired iPhone or Android into a useful security cam, with no no pricey hardware required. It's an easy, budget-friendly way to keep an eye on your front door, garage, or any spot that matters most. And best of all, you can start small. All you need is a free home security camera app and a way to position the phone where you want coverage. If you want to take it further, a simple phone stand or mount can give you the perfect angle. In minutes, your unused device can start streaming video, adding an extra layer of protection to your home without spending a dime. Step 1: Install a security camera app on your old smartphone Alfred Camera is free and lets you set up a cam solution yourself. Alfred Camera To begin, you will need to choose a security camera app. Most apps offer many of the same features, such as local streaming, cloud streaming, recording and storing footage locally or remotely, and motion detection and alerts. Once you're set up, you will be able to monitor your living space and control your security camera from anywhere, straight from your new phone. One of the best app options for setting up your phone as a security camera is Alfred. It's cross-platform, so it doesn't matter if your old phone was an Android phone or iPhone. And the same goes for your new phone. Alfred is free to use and gives you a remote view of your live feed, motion detection with alerts, free cloud storage, a two-way audio feed and use of both the front and rear cameras. To unlock additional features, like higher-resolution viewing and recording, zoom capabilities, ad removal and 30-day cloud storage, you can upgrade to Alfred Premium. 1. Download Alfred (Android, iOS) on both your old and new phones. You don't have to use a phone as a monitoring tool -- you can also download Alfred to your tablet or PC if you prefer to keep watch from there. Just make sure the app is on both devices. 2. On the new phone, swipe through the introduction and tap Start. Select Viewer and tap Next. 3. Once you get to the sign-in page, click Sign in with Google (a Google account is required) and sign in with your Google account credentials. 4. On the old phone, repeat the same steps, but instead of selecting Viewer, select Camera. Be sure to sign in to the same Google account. Alfred's app supports night vision, people recognition and more. Alfred Once both phones are signed in to Alfred, you're pretty much done with the setup. Alfred has simplified the camera options to include only a few settings. On iOS, you can only enable motion detection, choose between the front and rear cameras, and enable or disable audio. If you're using an Android device, you have those options and can also enable continuous focus, have Alfred automatically reopen if the phone reboots, set a resolution and enable a passcode lock. From your new phone, you can change a few more settings, such as turning notifications on or off, setting a camera or viewer name, adding other people to your Trust Circle (granting other people access to your video feeds), removing a camera, checking how many times a camera has disconnected, setting motion detection sensitivity and enabling a low-light filter on cameras. If Alfred isn't really doing it for you, you can explore other cam app options. Other apps that can give your old phone a security cam upgrade include: Faceter: Faceter is a surveillance app that offers quick setup and cloud storage for Apple and Android phones. Epoccam iVCam from E2ESoft: iVCam is a more open-source cam solution that's best for those who really want to tinker with camera settings and customize them, although like EpocCam it's focused a bit more on webcam-related activities than security. Step 2: Pick a spot for your new smartphone security camera You can use your new security camera in a variety of ways after the transition. Alfred Camera After you have the stream up and running, you will need to set up and position the camera. You may want it focused on the main entry point to your home, your backyard, the place where you store valuables or a point you think might be particularly vulnerable. If you have multiple old phones, you can set up multiple cameras for fairly robust video coverage. Step 3: Mount and power your security camera smartphone To mount or position the camera, a small smartphone tripod or suction-cup car mount can work wonders and help you position the camera in an inconspicuous place. To broaden the field of view, consider buying a wide-angle lens for your phone, something that can be purchased for between $5 and $20 online. Streaming video is very power-intensive, and the phone will be on 24/7. To keep the phone from dying in the first few hours, you'll need to position it close to a power source. A 10-foot Micro-USB,Lightning cable or USB-C cable and spare phone charger will give you more flexibility in where you can put it. And that's it: Now you can use the security cam app on your new phone to view the feed from your old phone's camera, and you've made your home more secure without spending much at all. Note: When choosing your mounting location, be sure to avoid furnace vents and other heat sources, such as in a window that gets full sun all day. Heat sources can damage your camera's lenses and battery over time, especially when combined with the heat of a power-hungry task like livestreaming. Final note: Old smartphones and security concerns Smartphones will eventually age out of security updates, which means they can eventually become vulnerable to attacks. If your old phone is still online -- like when you're using it as a security camera -- that's a problem. First, we recommend wiping any personal data off the phone before you transform it into a camera. Second, automate your updates when possible. Third, consider giving the phone a final use-by date, after which you'll recycle it. These days, companies try to push security updates for five to seven years after release (with some going even longer in recent years). We have a full guide on the security of older phones if you'd like to learn more. Finally, if we've got you excited about using your smartphone for home security purposes, don't forget that you can also download an app like Hidden Camera Detector to automatically search for telltale signs that there's a cam watching in the room. Airbnb may have outlawed indoor security cameras, but we don't blame you if you still want to check when you're traveling. For more, check out the best DIY home security systems.
