San Francisco, May 23 — OpenAI has agreed to acquire io, an artificial intelligence hardware startup co-founded by former Apple design chief Jony Ive, in an all-stock deal valued at nearly $6.5 billion, the companies announced on Wednesday. The acquisition marks OpenAI’s largest to date and signals the company’s first major push into consumer hardware.
The transaction will give OpenAI a dedicated unit focused on developing AI-powered devices and will bring onboard a team of about 55 engineers and designers, including several former Apple veterans who played key roles in developing the iPhone, Apple Watch, and other iconic products.
Jony Ive, widely regarded as one of the most influential designers in modern consumer technology, will lead design across OpenAI’s hardware and software efforts. Ive described the collaboration with OpenAI CEO Sam Altman as a “relationship and a way of working together that I think is going to yield products and products and products.”
As part of the deal, OpenAI is paying $5 billion in equity for io, with the remaining value stemming from a prior investment in the fourth quarter of 2024, when OpenAI acquired a 23% stake in the company. Altman, who does not hold equity in io, said the companies have been exploring concepts for nearly two years.
The San Francisco-based startup io was launched in 2024 by Ive alongside fellow Apple alumni Evans Hankey, Tang Tan, and Scott Cannon. The team’s mission has been to develop hardware for an era of artificial general intelligence (AGI)—a future where machines exhibit human-level cognitive abilities.
“AI is such a big leap forward in terms of what people can do that it needs a new kind of computing form factor to get the maximum potential out of it,” said Altman in a joint interview with Ive.
The first consumer device from the new unit is expected to launch in 2026. While Altman and Ive declined to offer specifics, they said the product would represent a novel approach to personal technology rather than a direct competitor to smartphones.
Apple shares fell as much as 2.3% in New York trading following news of the acquisition. The iPhone maker has faced criticism for falling behind rivals in artificial intelligence capabilities. Apple’s recently launched AI platform partially relies on OpenAI’s ChatGPT to enhance its offerings.
Despite his close ties to Apple—Steve Jobs once referred to Ive as his “spiritual partner”—Ive’s return to frontline consumer tech through OpenAI highlights shifting dynamics in the industry. Ive departed Apple in 2019 to form LoveFrom, a design collective that will remain independent but take over design responsibilities for all OpenAI products.
“We’re in the terminal phase of AI interactions,” said Altman. “We haven’t yet figured out what the equivalent of the graphical user interface is going to be, but we will.”
The io acquisition is part of a broader expansion strategy for OpenAI, which is also in talks for a $3 billion purchase of AI software company Windsurf. Earlier this month, the company named Instacart CEO Fidji Simo to head its applications division, enabling Altman to focus on strategic development.
Investors backing io include Laurene Powell Jobs’ Emerson Collective, Sutter Hill Ventures, Thrive Capital, Maverick Ventures, and SV Angel. The hardware team will operate from io’s existing workspace in San Francisco’s Jackson Square neighborhood, as well as OpenAI’s headquarters. Peter Welinder, OpenAI’s VP of product, will oversee the new division.
“It will be worth the wait,” said Altman. “It’s a crazy, ambitious thing to make.”
