OpenAI acquires Jony Ive’s AI startup io in landmark $6.5B deal: should Apple be concerned?

OpenAI will acquire io, the secretive artificial intelligence hardware startup co-founded by former Apple design chief Jony Ive, in a landmark all-stock transaction valued at nearly $6.5 billion.

The move is OpenAI’s most significant acquisition to date and signals a determined push into developing physical consumer devices powered by AI.

The purchase gives OpenAI access not only to io’s team of around 55 engineers and designers but also to the creative vision of Ive, the British-born designer behind Apple’s most iconic products including the iPhone, iPod, and MacBook Air.

The acquisition also formalises a relationship that has been in the making for nearly two years, as Ive and OpenAI CEO Sam Altman have quietly explored new device ideas together.

“I have a growing sense that everything I’ve learned over the last 30 years has led me to this place and to this moment,” Ive said in a joint interview with Altman.

It’s a relationship and a way of working together that I think is going to yield products and products and products.

OpenAI-io combine to release first hardware product in 2026

OpenAI’s acquisition includes a prior $1.5 billion investment stake in io made through its startup fund, along with a fresh $5 billion equity deal to absorb the company.

The team, now under OpenAI’s umbrella, will focus on building what Altman and Ive describe as “a family of devices” for the age of artificial general intelligence.

The duo did not share specifics about the hardware under development but indicated that the first product would not simply be an iteration of the smartphone or laptop, but an entirely new computing form factor designed to complement AI’s growing capabilities.

“People have an appetite for something new,” Ive said, hinting at user fatigue with current devices.

Altman added, “AI is such a big leap forward in terms of what people can do that it needs a new kind of computing form factor to get the maximum potential out of it.”

The first device from the collaboration is slated for release in 2026.

Who is Jony Ive?

Once described by Steve Jobs as his “spiritual partner”, Jony Ive’s return to the heart of consumer technology marks a significant comeback for one of the most influential designers of the modern era.

The British-born designer spent decades at Apple, where he worked closely with Steve Jobs to shape products that would define a generation, including the iPhone, iPod, iPad and Apple Watch.

Ive left Apple in 2019 after a storied tenure, having played a central role in establishing the visual and tactile language of today’s smartphones and personal devices.

At the time of his departure, Apple CEO Tim Cook suggested that Ive and the company would continue to collaborate, but no joint products ever materialized.

After leaving Apple, Ive founded the design firm LoveFrom, a creative collective composed of former Apple colleagues and longtime collaborators.

In 2023, he co-founded the startup io with Apple veterans Scott Cannon, Evans Hankey, and Tang Tan — each with deep experience in the company’s hardware ecosystem.

Acquisition brings ex-Apple hardware veterans to OpenAI

The acquisition also brings into OpenAI’s fold a collection of ex-Apple hardware veterans who followed Ive after his departure from the tech giant in 2019.

Among them are Scott Cannon, co-creator of the Mailbox app; Evans Hankey, Ive’s successor at Apple; and Tang Tan, who led iPhone and Apple Watch product design until 2024.

At io, the team had been developing devices suited for a future defined by artificial general intelligence—where machines achieve human-like cognitive abilities.

That mission now becomes part of OpenAI’s strategy as it seeks to embed intelligence not just in software but across the physical world.

The hardware ambitions are supported by other investors including Laurene Powell Jobs’ Emerson Collective, Thrive Capital, Maverick Capital, and SV Angel.

OpenAI confirmed that Altman holds no personal equity in io.

Apple shares fall amid concerns over AI leadership

News of the acquisition sent Apple shares down as much as 2.3% on Wednesday, as the market absorbed the implications of its former star designer now leading the charge at one of its AI rivals.

Apple has been seen as lagging behind in artificial intelligence, with its recently introduced AI platform partly dependent on OpenAI’s ChatGPT.

Analysts say the move could accelerate Apple’s perceived decline in AI leadership and product innovation.

“Jobs would be damn proud,” Altman said of the new venture, praising Ive’s creative legacy and calling their collaboration a “rare opportunity.”

Though the move poses potential competition for Apple, Altman and Ive were careful to note that their project does not aim to replace the smartphone.

“In the same way that the smartphone didn’t make the laptop go away, I don’t think our first thing is going to make the smartphone go away,” Altman said.

Building AI’s physical future

OpenAI’s push into consumer hardware arrives as competition in AI intensifies.

The company, currently valued at $300 billion, is racing to keep pace with rivals including Google, Anthropic, and Elon Musk’s xAI.

All are investing aggressively and rapidly launching new AI models and features.

To support its expansion, OpenAI has bolstered its hardware and robotics expertise.

In November, it hired Caitlin “CK” Kalinowski, the former head of Meta’s Orion augmented reality glasses project, to lead its consumer hardware and robotics efforts.

Kalinowski said the goal was to “unlock AI’s benefits for humanity” through physical products.

In a separate effort, OpenAI also invested in San Francisco-based robotics startup Physical Intelligence, which raised $400 million at a $2.4 billion valuation.

That company is working to integrate general-purpose AI into the physical world through robots powered by large-scale algorithms.

Amazon founder Jeff Bezos is also an investor in the startup.

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