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OpenAI acquires Apple veteran Jony Ive's AI device startup for $6.5 bn
Jony Ive, renowned for his work on early iPhones, will join OpenAI as creative head, tasked with developing a new generation of devices tailored for the generative artificial intelligence era.
OpenAI CEO Sam Altman and Ive, in a joint video, emphasized the need to move beyond "decades old" legacy products, hinting at a prototype device Altman described as "the coolest piece of technology the world will have ever seen."
OpenAI is acquiring io Products, the startup founded by former Apple design chief Jony Ive, in an all-stock deal valued at an estimated $6.5 billion. Ive, renowned for his work on early iPhones, will join OpenAI as creative head, tasked with developing a new generation of devices tailored for the generative artificial intelligence era.
This acquisition follows a two-year collaboration between Ive's design firm, LoveFrom, and OpenAI on generative AI devices – a sector where startups like Humane's AI Pin have faltered due to high computing demands and functionality issues. With Ive at the helm, OpenAI aims to marry its cutting-edge ChatGPT technology with the design prowess that propelled Apple products to global bestsellers.
While financial specifics weren't disclosed, the deal valuation is based on OpenAI's $300 billion valuation, with OpenAI previously holding a 23% stake in io. OpenAI CEO Sam Altman and Ive, in a joint video, emphasized the need to move beyond "decades old" legacy products, hinting at a prototype device Altman described as "the coolest piece of technology the world will have ever seen."
The news sent Apple shares down over 2%, as the iPhone maker has been slower to integrate advanced AI features, such as Apple Intelligence with ChatGPT access, compared to Android competitors. Analysts suggest OpenAI's ambition is to establish its own hardware platform, circumventing reliance on Apple's iOS or Google's Android, echoing Meta's strategy with its Quest goggles and Ray-Ban smart glasses.
The AI hardware landscape has seen mixed results. While Humane AI's Pin faced criticism for battery life, heat, and limited functionality, leading to HP's acquisition of its assets, Rabbit has sold over 100,000 of its r1 devices, though reviews still cite limited functionality compared to smartphones. OpenAI's high-stakes investment with Jony Ive underscores its belief in a future where AI-native devices redefine user interaction.
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