OpenAI Bets Big on Hardware with Jony Ive Deal

Arabian Post

22-05-2025

OpenAI has agreed to acquire artificial intelligence device startup io in a $6.5 billion all-stock transaction, bringing onboard Apple's iconic designer Jony Ive and his team as part of a bold expansion into hardware development. The deal, which is OpenAI's largest to date, aims to reshape the future of consumer electronics by embedding artificial intelligence deeply into everyday devices.
The acquisition values io based on a $5 billion equity commitment and includes an earlier 23% stake acquired by OpenAI, bringing the total to $6.5 billion. The integration of io's core team—comprising 55 engineers and designers experienced in cutting-edge product development—signals a shift in OpenAI's focus from software models alone to building AI-native hardware ecosystems. The deal is subject to regulatory clearance.
Jony Ive, the renowned design mastermind behind products such as the iPhone, iPod, iPad, and Apple Watch, co-founded io after leaving Apple's design studio. His creative leadership was instrumental in transforming Apple's design philosophy during his tenure. The collaboration with OpenAI and its CEO, Sam Altman, has been quietly evolving for two years, during which both leaders explored ways to fuse generative AI with breakthrough industrial design.
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The first AI device from this collaboration is scheduled to launch in 2026, with development already underway. According to internal planning documents and people familiar with the project, the product is being designed as a standalone AI assistant—possibly screenless—with ambient intelligence capabilities, redefining how users interact with digital systems. The vision is to develop hardware that embodies AI at its core, rather than adapting AI to fit existing devices.
Jony Ive described the partnership as a culmination of his decades-long work in product design. During a conversation with Altman, he stated that everything he had learned over the past 30 years had converged into this opportunity, describing the project as 'a relationship and a way of working together' with transformative potential. For OpenAI, the move represents a decisive step beyond its software roots, leveraging its leadership in generative AI to influence the physical interfaces of the future.
Sam Altman has made it clear that OpenAI's mission now includes reimagining the device landscape for the AI era. While OpenAI remains committed to refining its foundational models like GPT-4.5 and successors, the acquisition points to a broader strategy that combines software and form factor. By tapping into Ive's intuition for user experience and aesthetics, OpenAI is attempting to bridge the gap between abstract intelligence and tangible, human-friendly tools.
io has attracted significant investor interest since its inception. Backers include Emerson Collective, led by Laurene Powell Jobs, as well as Sutter Hill Ventures, Thrive Capital, Maverick Capital, and SV Angel. These firms have previously supported high-impact technology ventures and continue to express confidence in the potential of AI-native devices. OpenAI clarified that Altman himself does not hold equity in io, distancing the deal from personal financial entanglements.
Industry analysts suggest that OpenAI's acquisition of io could challenge existing players in the consumer electronics market, particularly in the smart device and wearable space. While companies like Apple, Google, and Amazon have integrated AI into their hardware, OpenAI's approach—building devices explicitly designed around AI from inception—could offer a more seamless and powerful user experience. The move could also influence broader trends in the industry, pushing competitors to rethink the hardware-software balance in the AI age.
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The newly formed hardware division under OpenAI will operate as a semi-autonomous unit within the company, led by io's core management and supported by OpenAI's research and engineering teams. Development is expected to include not only consumer-facing devices but also enterprise tools and environments optimised for OpenAI's suite of language and vision models.
Technical hiring is expected to accelerate as OpenAI builds internal manufacturing, supply chain, and logistics capabilities. Hiring notices suggest a focus on embedded systems, materials science, and human-computer interaction, as the company seeks to shape the next generation of AI devices. Former Apple engineers already on io's team bring expertise in prototyping, industrial manufacturing, and user interface design—skills critical to rapid iteration and scaling.
The broader strategic vision is to create a family of AI-first products, with the initial release acting as a launchpad for a new product category. Discussions between Altman and Ive have centred on minimising reliance on traditional app ecosystems and instead exploring new paradigms of interaction—such as natural language interfaces, gesture control, and predictive behaviour modelling. The ambition is to deliver experiences that feel more intuitive than conventional smartphones or laptops.
This acquisition comes at a time of increasing convergence between artificial intelligence and hardware. Meta's efforts with Ray-Ban smart glasses, Humane's AI Pin, and Rabbit's AI-powered pocket companion all hint at a wave of innovation targeting post-smartphone experiences. OpenAI's entry into this space raises the stakes, given its technological advantage in language and vision models and its capacity to integrate real-time, contextual intelligence into a device's core function.
OpenAI's pivot to hardware underscores a philosophical shift in how the company sees the future of human-machine interaction. Rather than waiting for hardware partners to adopt its models, it now seeks to define the interface itself. This aligns with broader ambitions voiced by Altman, who has spoken publicly about the need to rethink computing in an AI-dominated world—not merely adding AI features to existing frameworks but rebuilding the entire user experience from scratch.