OpenAI is buying an artificial intelligence device startup co-founded by Apple Inc. veteran Jony Ive for nearly $6.5 billion. By joining forces with the legendary designer, OpenAI plans to make a breakthrough in the hardware field.
OpenAI is buying an artificial intelligence device startup co-founded by Apple Inc. veteran Jony Ive for nearly $6.5 billion. By joining forces with the legendary designer, OpenAI plans to make a breakthrough in the hardware field.
The deal, the largest in OpenAI’s history, will give the company a dedicated unit to develop AI devices, Bloomberg reported. The acquisition of a secretive startup called io will also give the company access to Ive and other former Apple designers who were behind iconic products like the iPhone.
«I have a growing sense that everything I’ve learned over the last 30 years has brought me to this place and to this moment,» Ive said in a joint interview with OpenAI CEO Sam Altman. «It’s the relationships and the way we work together that I think will bring us products, products, and more products.»
For the British designer, the move marks a resounding return to the consumer technology industry he helped pioneer. Working for years alongside Steve Jobs, he created the look of the modern smartphone, as well as the iPod, MacBook, iPad and Apple Watch. He left Apple in 2019.
When Ive left Apple, CEO Tim Cook floated the idea that the two parties would remain employees. But they never released a single product together after Ive’s departure. And now the designer is embarking on a new collaboration with Altman, whom he called a «rare visionary.»
Jobs once called Ive his «spiritual partner,» and his new work on competing technology products could be seen as a bad sign for Apple, a company already struggling to compete in artificial intelligence. In an interview, Altman said that Jobs would be «damn proud» of Ive’s latest move.
OpenAI is aiming to create a product of a level of quality that «has never been seen before,» Altman said. AI is such a big leap forward in terms of what humans can do that it needs a new type of computing form factor to get the most out of it, he said.
As part of the deal, OpenAI will pay $5 billion in equity for io. The remainder of the nearly $6.5 billion comes from a partnership reached in the fourth quarter of last year, in which OpenAI acquired a 23% stake in io.
Separately, startup fund OpenAI also invested in Iva’s company at the time. Billionaire and philanthropist Laurene Powell Jobs is also an investor in io through her firm Emerson Collective. Other investors include Sutter Hill Ventures, Thrive Capital, Maverick Ventures and SV Angel. Altman has no equity stake in io, OpenAI said.
The deal is expected to close this summer, subject to regulatory approval. The io acquisition will provide OpenAI with about 55 engineers, software developers and manufacturing experts — a team that will build what Ive and Altman expect to be a family of devices. The two executives have been exploring some early ideas for about two years, they said.
At io, engineers set out to design, engineer, and manufacture a collection of products for the era of artificial general intelligence—the moment when technology achieves human-like cognitive abilities. Now, the team will continue that mission at OpenAI, posing a threat to the very devices the designers helped create.
This adds to Apple’s problems, which have lagged behind its Silicon Valley peers in the field of artificial intelligence. The company’s AI platform, released last year, lacks the capabilities of competing systems and relies in part on OpenAI’s ChatGPT chatbot to fill in the gaps.
Still, Ive and Altman don’t see the iPhone disappearing anytime soon. «Just like the smartphone didn’t replace the laptop, I don’t think our first product will replace the smartphone,» Altman says. «It’s a whole new type of thing.»
«The phone as it is now is a great general-purpose device,» Ive said, adding that people will interact with artificial intelligence in «very new ways.»
Recall that OpenAI recently acquired the startup Windsurf, which develops AI tools for software engineers, and announced the launch of its first family of AI models, SWE-1.
