- OpenAI acquires IO, Jony Ive’s start-up, in an all-stock deal worth $6.5B
- The collaboration aims to create new hardware for the AI era, beyond current mobile devices
What happened: OpenAI’s bold move into AI-native devices
OpenAI has finalised a $6.5B all-stock acquisition of IO, a hardware-focused AI start-up founded by Jony Ive, the legendary designer behind Apple’s iPhone and iMac. The acquisition marks OpenAI’s most ambitious expansion yet, aiming to pair powerful software models with bespoke hardware. IO, founded just a year ago, will bring its 55-person team into OpenAI’s ecosystem. The team will work within a newly created hardware division under the leadership of Peter Welinder, VP of product at OpenAI.
The move deepens the ties between Ive and OpenAI CEO Sam Altman, who first connected through personal discussions about the potential of artificial intelligence. Their shared dissatisfaction with modern smartphone usage—described by both as overwhelming and anxiety-inducing—drove their desire to rethink how people interact with digital tools. Their answer: creating physical products that integrate AI more naturally into everyday life.
Though Altman and Ive have not revealed specifics, they suggested these future devices would depart from screens and icons. Instead, users may experience AI through wearables, voice interfaces, or even ambient computing—technologies that sense, interpret, and respond to the world in real time. The first concepts are expected to be shared publicly next year, positioning OpenAI at the forefront of AI hardware design.
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Why it is important
The deal signals OpenAI’s strategic push to move AI beyond the software layer and into the physical world. Despite ChatGPT’s explosive success, artificial intelligence today still relies on traditional devices—mainly smartphones and laptops—for access. By acquiring IO, OpenAI is taking a bold step to define a new category of AI-native products, potentially setting the foundation for life beyond screens.
This vision aligns with the growing tech industry interest in ambient computing. Devices in this category operate quietly in the background, providing assistance without dominating attention. Think smart glasses that process visual input or pendants that respond to spoken queries—all designed to reduce screen time while enhancing user experience. Altman and Ive want to humanise AI interaction, prioritising privacy, intuition, and seamless integration over distraction and overload.
The deal also comes at a critical time for OpenAI, which faces increasing financial pressures and questions over its future corporate structure. While it expects significant revenue growth—from $3.7B this year to $11.6B next year—the company must invest aggressively to remain competitive. The acquisition of IO, though risky, may give OpenAI the creative edge it needs to remain not just relevant, but transformative, in the coming era of AI-first living.
