OpenAI’s blockbuster hardware partnership with Jony Ive has hit a sudden and public legal wall. The company has been forced to scrub all branding for its new “io” venture from the web following a trademark lawsuit from Iyo, a hearing device startup spun out of Google’s moonshot factory.
The abrupt removal of the brand, just weeks after its splashy debut, has cast a shadow over one of the tech world’s most anticipated collaborations. Despite the legal turmoil, the underlying $6.5 billion deal to acquire Ive’s startup remains intact. In a statement to The Verge, OpenAI spokesperson Kayla Wood confirmed the company is complying with a court order but plans to contest the complaint. “This page is temporarily down due to a court order following a trademark complaint from iyO about our use of the name ‘io.’ We don’t agree with the complaint and are reviewing our options.”
The Grand Vision for an AI Companion
The partnership was unveiled in May as a landmark merger, with OpenAI decisively entering the AI hardware arena by acquiring Ive’s newly formed company. The ambition was nothing short of revolutionary: to develop a new family of products that would redefine human interaction with artificial intelligence. The goal, according to early reports, is to create a “third core companion” to smartphones and laptops, moving beyond screens toward ambient, intuitive AI experiences.
This venture was framed as the culmination of both leaders’ careers. Jony Ive, the design legend behind Apple’s most iconic products, remarked, “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.” OpenAI CEO Sam Altman echoed this sentiment, telling The New York Times that the goal was to finally move beyond legacy devices. “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.” This high-stakes gamble was not just about creating a new gadget, but about pioneering a new category of personal technology. The ambition was so immense that Altman reportedly aimed to ship 100 million units of the new device faster than any product in history.
A Legal Quagmire Unfolds
The project’s grand vision quickly ran into a legal reality. The plaintiff, IYO Inc., filed a federal trademark infringement lawsuit that has temporarily halted the “io” branding. According to the suit, IYO holds a registered trademark for its name—pronounced “eye-oh”—that was first filed in September 2021. The legal filings contain an even more pointed allegation: that representatives from OpenAI and Ive’s firm LoveFrom held partnership discussions with IYO in early 2025, only for OpenAI to announce its own similarly named venture weeks later.
The legal pressure mounted quickly. During a hearing on June 18, a federal judge indicated she was receptive to IYO’s argument that OpenAI’s marketing could create consumer confusion even before a product launch, leading to a judge’s restraining order that prompted the website takedown. The move fueled the initial speculation reported by Bloomberg about the deal’s stability. A spokesperson for Jony Ive offered a forceful rebuttal to the allegations, stating, “This is an utterly baseless complaint and we’ll fight it vigorously.”
Part of a Broader Hardware Strategy
The high-profile venture, despite its troubled start, is a cornerstone of OpenAI’s broader strategy to embed its intelligence into the physical world and diversify its revenue streams. The push into hardware is not an isolated event. The company recently announced a major partnership with Mattel to create a new generation of AI-powered toys, with OpenAI providing tools for a “company-wide transformation.”
This move into toys and personal devices reflects a larger industry trend toward “ambient computing,” where technology acts as a constant, ambient companion rather than something a user must actively engage with through a screen.
The collaboration with Ive is the formal culmination of long-running discussions. Reports of a potential AI hardware venture between the two first surfaced in late 2023, signaling a deep, strategic alignment long before the “io” brand was announced. This sustained push indicates OpenAI sees proprietary hardware not just as a product line, but as a critical vehicle for delivering the full potential of its advanced AI models directly into the hands of consumers, creating a new ecosystem it can control and monetize.
