OpenAI buys Jony Ive’s AI hardware startup io Products in $6.4B all-equity deal
As part of the deal, io’s team, largely focused on building hardware, will merge with OpenAI and work closely with its research, engineering, and product units in San Francisco.
ChatGPT-maker has acquired io Products, the AI hardware startup co-founded by former Apple design chief Jony Ive and OpenAI CEO Sam Altman, in a $6.4 billion all-equity deal.
The acquisition is by far OpenAI’s largest to date and signals the AI firm's entry into the AI-enabled consumer hardware market. It already owns 23% of io Products and is paying $5 billion for the remaining stake in the company.
The deal follows OpenAI’s recent acquisitions of Windsurf, an AI-assisted coding tool, for $3 billion, and analytics startup Rockset last year.
“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,” said Sam Altman, CEO of OpenAI.
As part of the deal, io’s team—largely focused on building hardware—will merge with OpenAI and work closely with its research, engineering, and product units in San Francisco. Ive and his design firm, LoveFrom, will also take on broader creative and design responsibilities across both companies.
“Two years ago, Jony Ive and the creative collective LoveFrom quietly began collaborating with Sam Altman and the team at OpenAI. It became clear that our ambitions to develop, engineer and manufacture a new family of products demanded an entirely new company. And so, one year ago, Jony founded io with Scott Cannon, Evans Hankey, and Tang Tan,” OpenAI said in a blog post.
It added, “We gathered together the best hardware and software engineers, the best technologists, physicists, scientists, researchers and experts in product development and manufacturing. Many of us have worked closely for decades.”
io Products is reportedly building AI-enabled consumer devices, including a screenless phone and smart home gadgets. The acquisition would allow OpenAI to diversify its revenue streams beyond its current core offerings, which include ChatGPT and API services for developers.
Ive, known for his role in designing Apple products such as iPhone, iPod, and Mac, left the company in 2019 to start his design consultancy firm, LoveFrom. He publicly confirmed his collaboration with Altman on the new venture in an earlier interview with The New York Times.
The duo has already gained early-stage investment for the startup, including backing from Laurene Powell Jobs, the widow of Apple Co-founder Steve Jobs. The total funding was projected to reach $1 billion by the end of last year, the report added.
In 2023, Altman backed a funding round for Humane Inc, an AI wearable startup known for its screenless brooch that uses a miniature projector to display content on the user’s palm. The company raised over $200 million from several investors, including Microsoft, Altman, and Salesforce CEO Marc Benioff. Earlier this year, HP acquired some of Humane's assets for $166 million.
Edited by Suman Singh