OpenAI buys AI device startup io from Apple designer Jony Ive in $6.5 bn deal

OpenAI will buy the artificial intelligence (AI) device startup co-founded by Apple Inc. veteran Jony Ive in a nearly $6.5 billion all-stock deal, the largest ever in the ChatGPT maker’s history, in what also marks a major push for the firm into hardware.

The acquisition of the secretive startup, called io, will provide OpenAI with a dedicated unit to develop AI-powered devices.

OpenAI made the announcement by releasing a 9-minute short film on its platform. The first product from this partnership is expected to hit the market in late 2026.

Ive, who designed the iMac, iPod, iPhone and iPad, will “assume deep design and creative responsibilities” across the company, both companies said in an announcement.

Altman said he was excited to “try to create a new generation of AI-powered computers” together.

“I think we have the opportunity here to kind of completely re-imagine what it means to use a computer,” he said in the video that accompanied the announcement.

Ive said the world is on the “brink of a new generation of technology”. It may not be long until this new “family of devices” from the pair make an impact.

“The first one we’ve been working on I think has just completely captured our imagination,” he added.

Altman said he has already tried out a prototype of a new device designed by Ive and team, and he thinks it is “the coolest piece of technology that the world will have ever seen”.

Ive, who worked at Apple for 27 years, helped revive the company with products including the iPhone and iPod, and had also designed the iMac in 1998 and the iPad in 2010.

WHen Ive left Apple in 2019, chief executive Tim Cook had called him “a singular figure in the design world, and his role in Apple’s revival can’t be overstated”.

Shares of the iPhone maker declined about 2% following the news of his partnership with OpenAI.

Ive left to found his own firm, LoveFrom, which has worked with companies such as Airbnb and Moncler.

LoveFrom had been “quietly collaborating” with OpenAI for two years, the video statement about the merger said.

The idea for io, which Ive founded last year with others, followed this partnership.

“It became clear that our ambitions to develop, engineer and manufacture a new family of products demanded an entirely new company,” said Altman and Ive.

OpenAI had acquired a minority 23% stake in io—in late 2024. The new deal consolidates this stake, with OpenAI paying about $5 billion in equity for the remaining shares to achieve full ownership, bringing the total deal value to $6.5 billion.

The move will bring several prominent designers, including Evans Hankey, Tang Tan, and Scott Cannon, into OpenAI’s fold, strengthening its hardware ambitions.

Experts said the deal directly challenges Apple’s dominance in consumer devices, especially since the premium device maker struggles to keep up with rapid advancements in generative AI made by its rivals, such as OpenAI and Google.

Last Friday, OpenAI launched Codex, an artificial intelligence (AI) agent optimized for software engineering tasks. This cloud-based software engineering agent can work on many tasks in parallel, powered by codex-1, and is available to ChatGPT Pro, Team, and Enterprise users, the company announced in the blog post.

Bloomberg had reported that OpenAI is in talks to buy Windsurf for $3 billion.