OpenAI has completed its largest acquisition by purchasing Jony Ive’s hardware startup, io, for $6.5 billion in an all-equity deal. This collaboration unites one of the tech industry’s most celebrated designers with a leading artificial intelligence firm, signalling a major shift toward consumer AI hardware.
The deal, announced on May 21, 2025, represents OpenAI’s biggest acquisition. The company will invest $5 billion in equity to acquire the remaining 77%, building on its 23% stake from earlier collaboration. This partnership brings together OpenAI CEO Sam Altman and Ive, whose three-decade tenure at Apple produced iconic designs like the iPhone, iPad, and MacBook.
“Thrilled to be partnering with Jony, in my opinion the greatest designer in the world,” said Altman on X after the announcement. “Excited to try to create a new generation of AI-powered computers.”
This acquisition highlights OpenAI’s expansion beyond software into specialised AI hardware, potentially creating an entirely new category of devices optimised for AI interactions. The move aligns with OpenAI’s rapid growth, following funding that values the company at approximately $300 billion.
Critics on Reddit and investor forums have questioned the valuation metrics, given io’s pre-revenue status. However, insiders point to the firm’s $200 million annual design consultancy revenue through LoveFrom (Ive’s creative collective) to validate its economic potential.
The deal’s financial structure is particularly noteworthy: The all-equity arrangement preserves OpenAI’s cash reserves while giving io’s team a stake in OpenAI’s future growth, indicating confidence in the partnership’s long-term value.
io: A design-led AI hardware venture
Founded a year ago, io emerged from two years of quiet collaboration between Ive and Altman. Despite having no products or direct revenue, the startup has secured a remarkable valuation through its unique position and exceptional team.
The 55-person team includes several former Apple designers and executives, including Scott Cannon, Evans Hankey (Ive’s brief successor at Apple), and Tang Tan. This group represents some of tech’s most respected hardware designers. Reports suggest the io team has already developed early prototypes combining tactile materials, modular components, and ambient sensing, pointing toward a device potentially as revolutionary as the original iPhone.
“It became clear that our ambitions to develop, engineer and manufacture a new family of products demanded an entirely new company,” wrote Ive and Altman in a joint letter on OpenAI’s website. This insight led to io’s creation, aligning with OpenAI’s strategic vision.
While product details remain limited, the acquisition suggests the development of AI-native devices that will fundamentally reshape human-computer interaction. Sources indicate the first product could launch by 2026, featuring a design that moves beyond traditional smartphone formats toward a more ambient, voice-driven interface powered by OpenAI’s large language models.
Altman has reportedly called an early prototype “the coolest piece of technology the world will have ever seen.” One insider described it as “something different from a phone… a completely new surface.” Industry sources suggest the device may feature a screenless, voice-first interface, using OpenAI’s latest multimodal AI to create a seamless, always-available digital assistant.
Under the agreement, Ive won’t take a direct role at OpenAI; his design firm LoveFrom will “assume deep design and creative responsibilities across OpenAI and io.” The io team will form a new hardware division at OpenAI under VP of Product Peter Welinder in San Francisco.
Market impact, competition with Apple, and broader industry implications.
The acquisition positions OpenAI to compete directly with established hardware companies, especially Apple. Following the announcement, Apple’s stock dropped 2%, reflecting market concerns about competition from the partnership between OpenAI and Apple’s former design chief.
“I have a growing sense that everything I have learned over the last 30 years has led me to this moment,” Ive shared in the announcement video. “While I am both anxious and excited about the responsibility of the substantial work ahead, I am so grateful for the opportunity to be part of such an important collaboration.”
Success depends on navigating Silicon Valley’s delicate balance: maintaining revolutionary ambition while avoiding the hubris that doomed predecessors like Google Glass. As I reflected in the announcement video, “This moment feels like 2007, but the stakes are higher. We’re not just building a better phone—we’re shaping how a species thinks.”
The io acquisition marks a crucial step for OpenAI, as it advances toward tangible expressions of its AI technology and potentially transforms how people interact with artificial intelligence in daily life.
Observers note that OpenAI’s vertical integration—combining proprietary AI models with custom hardware—could help it surpass competitors relying on third-party platforms. The move also raises important questions about privacy and data security as ambient AI devices become more integrated into daily life. The path forward suggests fundamental shifts in product design, labour markets, and human cognition. OpenAI and Ive’s shared vision may well define technology’s next decade.
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