Channelnews : openai acquires jony ive’s ai hardware startup in $6. 5 billion deal

OpenAI has acquired IO, the artificial intelligence hardware setup founded by former Apple design chief Jony Ive, in a $6.5 billion all-stock deal that represents the ChatGPT maker’s largest

acquisition to date. The acquisition brings together two Silicon Valley heavyweights in an ambitious effort to create what they call “a new family of products” for the artificial

intelligence era. Ive, who designed iconic Apple products including the iPhone and iPod while working closely with Steve Jobs, will assume creative and design responsibilities across OpenAI.

OpenAI is paying approximately $5 billion in stock to fully acquire the one-year-old startup, having already held a 23% stake in the company from a previous agreement. The deal includes

IO’s team of 55 engineers and researchers, led by Ive and fellow former Apple executives Tang Tan and Evans Hankey. The partnership aims to move AI beyond smartphone apps into physical

devices that could enable “ambient computing”, seamlessly processing the world in real time through wearable devices like pendants or glasses. Both executives expressed dissatisfaction with

the current technology’s impact on users, with Ive acknowledging responsibility for the “anxiety and distractions” of constant connectivity. “We’ve been waiting for the next big thing for 20

years,” said OpenAI CEO Sam Altman. “We want to bring people something beyond the legacy products we’ve been using for so long.” While the executives declined to detail specific products,

they indicated plans to share more information next year, with their first device expected to debut in 2026. The collaboration began after Ive became intrigued by ChatGPT through his son’s

enthusiasm for the technology and subsequently connected with Altman. The acquisition comes as OpenAI, valued at $300 billion following a March funding round, faces pressure to increase

revenues while managing enormous costs for AI development. The company expects $3.7 billion in sales this year and $11.6 billion next year. Apple shares fell more than 2% following news of

the deal, which could position OpenAI as a direct competitor to the iPhone maker’s hardware business. The transaction is subject to regulatory approval and is expected to close this summer.