OpenAI Acquires Jony Ive’s AI Device Startup io in $6.5B Deal

OpenAI will acquire io, an AI hardware startup co-founded by legendary Apple designer Jony Ive, in an all-stock deal valued at nearly $6.5 billion. The acquisition marks OpenAI’s largest to date and a major strategic push into consumer devices.

The deal brings together OpenAI’s leadership in artificial intelligence and Ive’s legacy in hardware design, forming a new in-house unit dedicated to developing AI-powered devices. It also reunites a group of former Apple engineers and designers, many of whom played key roles in building the iPhone, iPad, and Apple Watch.

“I have a growing sense that everything I’ve learned over the last 30 years has led me to this place and to this moment,” Ive said in a joint interview with OpenAI CEO Sam Altman.

A New Chapter in AI-Driven Hardware

The startup, io, was founded last year by Jony Ive and former Apple colleagues Evans Hankey, Tang Tan, and Scott Cannon—veterans of the company’s hardware design and engineering teams.

Hankey, who led Apple’s hardware design after Ive’s departure, said the debut of ChatGPT marked a turning point.

“A number of us looked at each other and said, ‘This is probably the most incredible technology of our career,’” she said in an interview.

That realization prompted the group to rethink how hardware must evolve to meet the demands of AI—and ultimately led to the formation of io—a team now made up of 55 hardware, software, and manufacturing specialists.

Under the acquisition, io will become a dedicated hardware group within OpenAI, led operationally by Peter Welinder, a product VP reporting to CEO Sam Altman. Hankey, Tan, and Cannon will join OpenAI as full-time employees.

Ive will remain independent, with his design firm LoveFrom taking the lead on the design of all OpenAI products—including software—while continuing to operate as a separate studio. LoveFrom will maintain its existing relationships with clients like Ferrari NV and Airbnb Inc., but won’t take on major new projects.

The Vision: A New Kind of Device

While details remain under wraps, Altman and Ive said they have been exploring early product ideas for over two years and intend to debut their first AI device in 2026. The product is expected to introduce a new interface paradigm for interacting with artificial intelligence.

“AI is such a big leap forward in terms of what people can do that it needs a new kind of computing form factor to get the maximum potential out of it,” said Altman.

“People have an appetite for something new, which is a reflection on a sort of an unease with where we currently are,” added Ive.

The goal is not to replace the smartphone but to rethink how people engage with AI. Altman likened it to the shift from desktop to mobile computing, suggesting that current devices are poorly suited for AI’s full potential.

“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 said. “It is a totally new kind of thing.”

“The phone, as it currently is, is a remarkable general-purpose device,” Ive said, adding that people will connect with AI in “very new ways.”

“We are obviously still in the terminal phase of AI interactions,” Altman said. “We have not yet figured out what the equivalent of the graphical user interface is going to be, but we will.”

Deal Structure and Strategic Backing

The $6.5 billion valuation includes $5 billion in equity for io and additional investment based on a previous 23% stake OpenAI acquired last year. The deal is expected to close this summer, pending regulatory approval.

Other backers of io include the Emerson Collective (led by Laurene Powell Jobs), Sutter Hill Ventures, Thrive Capital, Maverick Ventures, and SV Angel. OpenAI clarified that Altman does not hold personal equity in io.

The acquisition also follows OpenAI’s recent appointment of Fidji Simo, the CEO of Instacart, as head of applications—freeing Altman to focus on broader company strategy and partnerships.

A Return to Hardware—and a New Rival for Apple

For Jony Ive, the acquisition marks a high-profile return to consumer hardware after leaving Apple in 2019. Though he and Tim Cook initially indicated continued collaboration through LoveFrom, no joint products were released.

Now, Ive’s work will directly support OpenAI—a move that adds pressure to Apple, which has fallen behind peers in developing AI-powered products. Apple’s platform currently relies in part on OpenAI’s ChatGPT to fill capability gaps.

While the product’s details remain under wraps, the partnership places OpenAI on a collision course with Apple—particularly in areas where Ive once helped set the standard.

Altman said in the interview that Jobs would be “damn proud” of Ive’s latest move.

What This Means

This acquisition signals a shift in the AI race—away from software alone and toward integrated AI devices that could redefine how people interact with machines.

By joining forces with one of the most influential hardware designers of the last century, OpenAI is moving to create its own computing platform—one built around the capabilities and constraints of AI, not legacy operating systems. The team from io isn’t just iterating on smartphones—they’re aiming to build something fundamentally new.

For OpenAI, the acquisition offers control over the entire product experience, from software to form factor. For users, it could eventually mean intuitive, embedded AI tools designed not around screens and keyboards, but around how we think, speak, and move through the world.

While the first product won’t arrive until 2026, the team’s ambitions reflect a long-term vision: to build the next great interface of the AI era—before anyone else does.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.