OpenAI's biggest acquisition ever: $6.5 billion for ex-Apple designer AI device startup io

With models pretty much rolled up, hardware has become another battleground in the AI space. Following yesterday's Google Internet company After teasing the upcoming Android XR devices with Gemini AI integration at the I/O conference.OpenAI It's also sitting on the sidelines, officially announcing today that it has acquired a mysterious startup specializing in AI hardware for nearly $6.5 billion in all-stock deals.

The company is called io, and was co-founded by former Apple chief designer Jony Ive. This acquisition is the largest since OpenAI's inception, meaning they will get a team specializing in AI hardware, and also formally involve Ive and a group of old partners who have been involved in the design of Apple's classic products, and enter the hardware field together.

The biggest deal in OpenAI history

"I have a growing sense that everything I've learned over the last thirty years has led me to this point." lve said in a joint interview with OpenAI CEO Sam Altman, "Our partnership, and the way we work together, I believe will lead to product after product."

Two years ago, Jony Ive and his creative team LoveFrom quietly began a collaboration with Sam Altman and the OpenAI team. This collaboration, based on friendship, curiosity, and shared values, quickly evolved into a larger vision. What began as a vision and exploration evolved into a concrete design.

These ideas seem important and meaningful, full of optimism and hope, uplifting and bringing a smile to everyone's face. They bring back memories of a time when we used to celebrate human achievement - a time when we were grateful for new tools because they helped us learn, explore and create.

We came to realize that in order to truly develop, design and manufacture a whole new line of products, it would take a whole new company. So a year ago, Jony co-founded io with Scott Cannon, Evans Hankey and Tang Tan."

The team brings together top hardware and software engineers, technologists, physicists, scientists, researchers, and experts in product development and manufacturing. According to Bloomberg, many of the team are from Apple, such as Hankey, who was Ivey's successor at Apple until 2023; Tang Tan, who was responsible for product design for the iPhone and Apple Watch until 2024; and Cannon, who worked at Apple before co-creating the popular mailbox app Mailbox, which was later acquired by Dropbox. Cannon worked at Apple and then co-built the once-popular Mailbox app, which was later acquired by Dropbox.

The announcement states, "Today, the io team, which is dedicated to building inspiring, user-empowered, and creativity-inspired products, will merge with OpenAI to work more closely with the research, engineering, and product teams in San Francisco. With the integration of io into OpenAI, Jony and LoveFrom will also take full responsibility for the design and creative aspects of OpenAI and io."

Jony Ive, once considered by Steve Jobs as his "spiritual companion," was a key figure in the development of the iMac and iPod products.

Many of you will have heard of Jony lve, one of the most influential industrial designers of our time, known for his legendary career at Apple.

Born in London, England in 1967, Jony lve graduated from Newcastle Polytechnic (now Northumbria University) with a major in industrial design.

In 1992, he joined Apple at a time when the company was in the midst of a downturn. When he first joined Apple, Ive was a member of the design department responsible for designing the second generation of the Apple Newton (handheld computer) and the MessagePad 110.

However, in the years following his appointment, the disorganization of Apple's internal management, as well as the commercial failure of its products and design setbacks, led Jony Ive to prepare for his departure from Apple on several occasions.

Coincidentally, with Steve Jobs' return to Apple and the company in renaissance mode, Ive was promoted to Senior Vice President of Industrial Design and began leading the design of core products, gradually becoming one of Jobs' most trusted partners.

In 1998, Ive led the team that designed the iMac, which received critical acclaim for its translucent plastic enclosure and advanced design.

Shortly after the success of the iMac, Jobs and Ive opened the door to innovation again with the iPod, which cemented Ive's position at Apple, where he was the only Apple designer with a private office when he opened his own design office in the early 2000s.

In this regard, the foreign media will be evaluated as, "If Steve Jobs is a visionary whose ideas will change the computer world, then Ive will be the one who will dress them up and make them irresistible to consumers. Jobs himself once called Ive his "spiritual companion".

Since then, Ive has also been deeply involved in the design of the Apple Watch and the look and feel of modern smartphones. His drive for minimalism, the pursuit of materials and craftsmanship, and a design philosophy that focuses on the emotional experience of the user have not only transformed Apple, but also reshaped the entire consumer electronics industry. He has received numerous honors for his work, including being named one of Time magazine's "Most Influential People".

In 2019, Ive left Apple to start his own design firm, LoveFrom, a low-key and elitist creative collective that works with a number of top companies, including Airbnb, and has continued to consult for Apple for some time.

In 2022, the New York Times revealed that the service contract between Apple and Jony Ive would not be renewed after the expiration of the contract, thus parting ways. At that time, for the reasons behind, the foreign media also has several layers of analysis: on the one hand, some Apple executives once questioned Apple's "consulting fees" paid to Ive, in addition, it is also frustrated with the departure of several designers to join Ive's company; on the other hand, Ive in 2019 when he left the company, he also had to sign our legendary On the other hand, when Ive left in 2019, he had also signed our legendary "non-compete agreement", which prevented him from working on jobs that Apple considered competitive. As a result, it's also been claimed that Ive wanted the freedom to take on different clients without being beholden to Apple.

As we've known until now, Jony Ive partnered with OpenAI the year after he stopped consulting for Apple.

New products are expected to be unveiled next year

The acquisition comes as OpenAI strives to stay ahead of the curve in generative AI. Just a few weeks ago, it paid $3 billion for AI programming tool Windsurf, and now OpenAI is turning its attention to hardware, looking to build an AI device that's "unprecedented in consumer electronics.

In Sam Altman's view, AI is a huge leap in human ability, and to truly unleash its potential, there must be a new form of computing to match. That is to say, just rely on cell phones, computers and other traditional equipment is not enough, AI needs a new "container".

Under the agreement, OpenAI will acquire io for $5 billion in stock, with another $1.5 billion or so coming from a partnership last year, when OpenAI took a 23% stake in io. In addition, OpenAI's Venture Fund is an early investor in the company.

The deal, which is expected to close this summer, is still awaiting regulatory approval. Upon completion of the deal, OpenAI will receive approximately 55 hardware engineers, software developers, and manufacturing specialists from the io team.

This is undoubtedly another layer of pressure on Apple. Apple's progress in AI has lagged significantly compared to other Silicon Valley giants, and the AI platform launched last year has limited functionality, even relying on OpenAI's ChatGPT to make up for the shortcomings.

However, lve and Sam Altman don't think the iPhone will be quickly phased out as a result. sam Altman said, "Just like smartphones didn't completely replace laptops, the first product we're about to launch, won't replace cell phones. It's going to be a whole new type of device." The phone is still very much an all-purpose device," adds Lve, "but people will be interacting with AI in a "whole new way".

With the 58-year-old design guru on board, it has also created quite a bit of anticipation about what the next generation of AI devices will look like. The first device developed by io in collaboration with OpenAI is reportedly expected to debut in 2026. Are you looking forward to this?

Reference:
https://openai.com/sam-and-jony/
https://www.bloomberg.com/news/articles/2025-05-21/openai-to-buy-apple-veteran-jony-ive-s-ai-device-startup-in-6-5-billion-deal