OpenAI is making a major move into AI hardware with the acquisition of io Products, a startup founded by legendary Apple designer Jony Ive, in a $6.5 billion all-stock deal. The acquisition marks a significant shift in OpenAI’s strategy, extending beyond software to build next-generation AI-driven consumer devices.
Jony Ive Joins OpenAI as Creative Head
With the acquisition, Jony Ive, best known for designing Apple’s iPhone, iPad, and MacBook, will become Creative Head at OpenAI. His mission: to help design breakthrough devices for the AI era, redefining how humans interact with generative AI.
In a joint video announcement, OpenAI CEO Sam Altman and Ive emphasised the need to move beyond ageing legacy devices to something radically new. While specific hardware details are still under wraps, Altman hinted that the prototype under development is “the coolest piece of technology the world will have ever seen.”
Deal Details and Valuation
Though financial terms weren’t officially disclosed, sources report the transaction is valued at $6.5 billion in stock, based on OpenAI’s $300 billion internal valuation. OpenAI already owned a 23% stake in io Products before the acquisition.
Founded a year ago, io Products evolved from Ive’s design firm LoveFrom, which has worked with OpenAI for the past two years to develop AI-native hardware.
Why This Acquisition Matters
This deal underscores OpenAI’s ambition to control the next-generation AI hardware platform rather than relying on existing systems like Apple’s iOS or Google’s Android.
Analyst Gil Luria of D.A. Davidson said the acquisition mirrors similar moves by tech giants like Meta, who seek to dominate both hardware and software ecosystems. “OpenAI doesn’t want to be dependent on iOS or Android; it wants to own the platform just like Meta does with Quest and Ray-Ban smart glasses,” Luria said.
Apple’s stock fell over 2% following the announcement, signalling investor concern over the company’s slower AI rollout compared to competitors.
OpenAI’s Broader Hardware Strategy
The move comes as OpenAI builds out its consumer hardware division. In late 2024, it hired Caitlin Kalinowski, former head of Meta’s AR division, to lead robotics and consumer hardware initiatives. Kalinowski brings extensive experience in augmented reality and AI product integration.
Additional Strategic Acquisitions
OpenAI has also made recent acquisitions to strengthen its AI ecosystem:
- Windsurf (formerly Codium): Acquired for $3 billion to enhance AI-assisted coding tools and developer productivity.
- Rockset: A real-time analytics database company, acquired to improve data processing and retrieval for advanced AI applications.
OpenAI’s acquisition of Jony Ive’s io Products is a bold step toward creating AI-native devices that could redefine human-computer interaction. With high-profile hires, strategic acquisitions, and deep investments in both software and hardware, OpenAI is positioning itself to lead the future of integrated AI platforms.
