OpenAI is exploring an acquisition that would bring a hardware startup co-founded by its own CEO Sam Altman and former Apple design lead Jony Ive—under its corporate roof, according to reporting by The Information. The venture has secured over $1 billion in funding commitments from backers including Thrive Capital and is focused on building a consumer AI device that prioritizes natural interaction over traditional screens.
OpenAI initially did not take a stake in the startup when it was formed in 2023, as Altman reportedly kept it outside the company to avoid conflicts of interest. However, OpenAI employees were consulted during the early planning phase. The current acquisition talks remain preliminary and may not result in a deal, but they reflect OpenAI’s growing ambition to integrate AI capabilities into purpose-built hardware that aligns tightly with its own software infrastructure.
First Public Report of the Hardware Venture
The collaboration between Altman and Ive aims to blend iconic design with advanced AI capabilities, according to sources familiar with the effort. The goal is reportedly to challenge entrenched products like the Apple Watch by completely rethinking how users interact with intelligent systems.
With Ive’s minimalist design philosophy and Altman’s software-forward AI vision, the project could be set out to develop a device that would minimize or even eliminate reliance on visual displays. SoftBank’s Masayoshi Son had reportedly participated in early discussions, although his continued involvement has not been confirmed. The startup remains unnamed and operates silently, but the scale of its funding suggests major ambition.
Trademark Filing Reveals Consumer AI Hardware Scope
The reported acquisition discussions follow a major strategic filing by OpenAI. In February, the company submitted a wide-ranging trademark application to the U.S. Patent and Trademark Office outlining potential plans for AI-powered devices including smartwatches, glasses, AR/VR headsets, wearable peripherals, and humanoid robots. The filing signaled OpenAI’s intent to expand far beyond software tools and into fully integrated physical platforms.
Speaking to The Elec, Altman commented on this hardware shift that the company is exploring the development of AI-dedicated devices and want to build them through partnerships with multiple companies. The startup with Ive, though technically independent, appears to be the most mature of those partnerships—and could become a wholly-owned subsidiary if talks succeed.
The company is also staffing up to support hardware production. In November 2024, OpenAI hired Caitlin Kalinowski, formerly head of AR hardware at Meta, to lead a new robotics division. Job listings since then have included positions focused on real-time interaction systems, sensor fusion, and mechanical engineering—suggesting ambitions that reach well beyond software deployment.
Further down the stack, OpenAI is working with TSMC and Broadcom to produce custom AI chips by 2026, with first designs expected this year. These chips are expected to reduce the company’s reliance on Nvidia’s GPUs while improving inference efficiency and power consumption—key challenges in deploying AI models on edge devices or wearables.
AI Hardware as Strategic Monetization Path
One reason OpenAI may be intensifying its hardware ambitions is economics. Maintaining products like ChatGPT is expensive and so far not generating profit. Hardware could help diversify revenue and offer more direct monetization than subscriptions or enterprise APIs.
However, recently OpenAI’s financial situation has improved, meaning the company can continue investing in its product portfolio. OpenAI closed a $40 billion funding round led by SoftBank, raising its valuation to now $300 billion. With significant capital on hand, the company has room to explore acquisitions and scale its manufacturing and distribution infrastructure for consumer products.
Meanwhile, OpenAI continues to expand on the software front. The company is preparing to release an open-weight AI model later this year—an apparent response to growing developer interest in alternatives like Meta’s LLaMA series, which just advanced with the new LLaMA 4 models, and also DeepSeek’s highly performing open models.
Risks and Challenges of Hardware Integration
Should OpenAI proceed with the acquisition, it would face new demands outside its traditional software domain. Designing and delivering physical products at scale brings logistical and technical risks—battery life, component sourcing, thermal management, and latency among them. These issues become even more complex when integrating large AI models that require real-time responsiveness in unpredictable environments.
The competition isn’t waiting. Apple continues to embed AI across its hardware ecosystem, while companies like Tesla and Figure AI are developing humanoid robots and Meta has deep investments in wearable augmented reality, betting on AI powered smart glasses. These companies bring years of hardware experience and robust supply chains—areas where OpenAI is still a newcomer.
Even with its strength in natural language processing, OpenAI will need to prove that its models can perform reliably in constrained environments. While custom chips may help address inference efficiency, real-world validation remains crucial before these devices reach mass-market viability.
That said, acquiring the Altman-Ive startup would give OpenAI tighter control over the interface layer of its AI ecosystem—one that goes beyond screens and keyboards. It could signal the company’s move toward not just powering artificial intelligence, but shaping the form it takes in the hands of users. Whether it can execute on that vision without compromising performance, reliability, or trust will determine how far this strategy can go.
