OpenAI is decisively entering the AI hardware arena, merging with “io,” a new company co-founded by legendary designer Jony Ive. The strategic move aims to revolutionize how humans interact with artificial intelligence. The deal, valued at $6.5 billion, positions Ive and his firm LoveFrom to spearhead design across OpenAI and the newly integrated io team.
Io was established a year ago by Ive, Scott Cannon, Evans Hankey—who previously succeeded Ive at Apple—and Tang Tan. Their mission is to “develop, engineer and manufacture a new family of products,” OpenAI stated. This merger signifies a deep commitment to creating AI-centric devices.
These aim to move beyond “traditional products and interfaces,” potentially ushering in an era of intuitive, perhaps even screen-less, AI experiences. The collaboration began two years prior, evolving from shared curiosity into tangible designs.
The $6.5 billion acquisition reportedly consists of $5 billion in equity. The remainder reflects OpenAI’s prior 23% stake in io. The io team, comprising around 55 experts, will now work closely with OpenAI’s San Francisco operations. Investors in io included prominent names. These featured Laurene Powell Jobs’ Emerson Collective and Thrive Capital.
A New Chapter In AI Product Design
Jony Ive expressed that “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.” He elaborated on the collaboration, stating, “It’s a relationship and a way of working together that I think is going to yield products and products and products.”
Sam Altman, OpenAI’s CEO, also shared his perspective on the collaboration’s potential. He added, “AI is an incredible technology, but great tools require work at the intersection of technology, design, and understanding people and the world. No one can do this like Jony and his team; the amount of care they put into every aspect of the process is extraordinary.”
Altman further believes AI’s technological leap necessitates “AI’s technological leap requires “a new kind of computing form factor to get the maximum potential out of it.””
Ive’s design firm, LoveFrom, will remain independent for existing clients like Ferrari and Airbnb. However, it will not take on major new projects, as Ive will now lead product design at io and across all of OpenAI.
Designer Mark Newson, a long-time collaborator with Ive, is also part of the io team. While specifics on the new devices remain under wraps, with details anticipated next year, the ambition is clear. Altman told The New York Times, “We’ve been waiting for the next big thing for 20 years. We want to bring people something beyond the legacy products we’ve been using for so long.” with Ive adding the goal is to create “amazing products that elevate humanity.”
The Path To Hardware Integration
This formal union follows earlier indications of a deep partnership. Since September 2023 Ive and Altman were discussing new AI hardware. Earlier reports suggested that OpenAI was considerating acquiring a hardware startup co-founded by Altman and Ive. This venture, now revealed as io, focused on consumer AI devices prioritizing natural interaction.
OpenAI’s broader hardware ambitions have been increasingly visible. The company filed an extensive trademark in February 2025 for various AI-powered devices. Altman also commented to The Elec about exploring AI-dedicated devices through partnerships. Furthermore, OpenAI hired Caitlin Kalinowski, former Meta AR hardware head, in November 2024 to lead a new robotics division. The company is also developing custom AI chips with TSMC and Broadcom, expected by 2026.
Strategic Imperatives And Market Impact
The push into hardware offers OpenAI a strategic path for revenue diversification. Maintaining advanced AI models is costly and proprietary hardware provides a direct monetization channel. OpenAI’s financial position has recently strengthened, since closing a $40 billion funding led by Softbank round in early 2025.
The announcement appeared to ripple through the market, with Apple shares slipping 1.7% amid concerns about potential competition. The planned AI devices aim to be “less disruptive than the iPhone,” with past descriptions suggesting screen-free, voice-based interaction.
However, OpenAI faces significant challenges in hardware, from design to manufacturing and competition. Despite these hurdles, the collaboration between two of tech’s most influential figures signals a potentially transformative shift in how AI is embodied and experienced.
