OpenAI acquires Jony Ive’s io for $6.5B in stock, signaling a major pivot toward AI-native consumer hardware.
OpenAI has finalized its largest acquisition to date, purchasing hardware startup io—founded by legendary designer Jony Ive—for $6.5 billion in equity. Announced on May 21, 2025, the deal positions OpenAI at the forefront of AI-native consumer hardware.
The acquisition builds on OpenAI’s earlier 23% stake in io, investing an additional $5 billion to secure the remaining 77%. This partnership brings together OpenAI CEO Sam Altman and Jony Ive, the former Apple design chief behind the iPhone, iPad, and MacBook.
“Thrilled to be partnering with Jony, in my opinion the greatest designer in the world,” said Altman on X. “Excited to try to create a new generation of AI-powered computers.”
Strategic Pivot Toward AI Hardware
The move marks OpenAI’s most definitive expansion beyond software, signaling intent to create a new class of AI-optimized devices. It comes amid a wave of funding that pegs OpenAI’s valuation at roughly $300 billion.
Despite io’s lack of direct revenue, critics questioning the valuation point to its associated consultancy LoveFrom—which generates $200 million annually—as proof of economic weight. The acquisition, structured entirely in equity, conserves OpenAI’s cash while offering io’s team a stake in future growth.
The Vision Behind io: Designed for the Future
Founded just a year ago, io emerged from two years of low-profile collaboration between Ive and Altman. Though it has no market-ready products yet, its 55-person team—comprising former Apple veterans such as Scott Cannon, Evans Hankey, and Tang Tan—is already generating buzz.
Reports suggest early prototypes feature modular design, tactile materials, and ambient sensing. These concepts hint at a device that could rival the impact of 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 statement on OpenAI’s website.
Insiders indicate the debut product, expected by 2026, may depart from conventional smartphones. Described as voice-first and screenless, the device would be powered by OpenAI’s multimodal language models to deliver an ambient, AI-native experience.
Altman reportedly referred to an early prototype as “the coolest piece of technology the world will have ever seen.” Another insider described it as “something different from a phone… a completely new surface.”
Operational Details and Creative Oversight
Jony Ive will not take a formal role within OpenAI. Instead, his design collective LoveFrom will “assume deep design and creative responsibilities across OpenAI and io.” The io team will operate as a new hardware division based in San Francisco, led by OpenAI VP of Product Peter Welinder.
Ripples Across the Tech Industry
The announcement has already shaken the market. Apple’s stock dipped 2% following the news—reflecting concern over competition from a firm led by Apple’s former design icon.
“I have a growing sense that everything I have learned over the last 30 years has led me to this moment,” said Ive in an 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.”
He added, “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.”
A Defining Moment for AI’s Next Chapter
Industry analysts suggest that OpenAI’s vertical integration of proprietary software and purpose-built hardware may give it an edge over competitors that rely on third-party platforms. However, the move also raises critical concerns about user data, privacy, and the societal impact of ambient AI systems.
The acquisition may prove a watershed moment in the convergence of design and artificial intelligence—one that redefines how humans interact with machines.
