New AI Devices on Horizon as OpenAI Unites Billion Deal

OpenAI has agreed to acquire io, the AI-focused hardware startup co-founded by legendary Apple designer Jony Ive, in an all-equity transaction valued at $6.5 billion. It’s OpenAI’s largest acquisition to date and marks a bold push into creating purpose-built AI hardware—what Sam Altman and Ive envision as the “iPhone of AI.”

From Sketches to Silicon: The Roots of io

Ive left Apple in 2019 to start his design firm LoveFrom, and launched io in 2023 to explore AI-powered products beyond screens. Backed early on by OpenAI, io’s 55-member team of engineers, designers, and researchers has spent the past year prototyping devices that blend generative AI with intuitive hardware interfaces.

Deal Details and Strategic Rationale

Structure: OpenAI will issue roughly $5 billion in stock and assume existing io shares to reach the $6.5 billion valuation.
Leadership: While Ive won’t join OpenAI full-time, LoveFrom will remain independent and lead design across both io and OpenAI initiatives. Hardware-and-robotics veteran Peter Welinder will helm io’s integration into OpenAI’s product roadmap.
Investors: Existing backers like Emerson Collective and Thrive Capital participated alongside OpenAI to underwrite the deal.

Sam Altman says the partnership marries world-class design with OpenAI’s generative-AI expertise, aiming to deliver AI devices that feel as seamless and personal as modern smartphones.

Beyond the Headlines: What the NYT Missed

Prototype Focus Areas
io has configured three form factors: a wearable AI assistant (voice-first, screen-less), a desktop AI hub (for creative workflows), and an AI companion robot for home environments—each leveraging on-device chipsets for privacy and low-latency responses.
Manufacturing Partners
Early talks involve Foxconn and Pegatron to co-develop components, hinting at a supply chain parallel to Apple’s iPhone lines—critical for scaling production.
Regulatory Review
The deal awaits antitrust scrutiny, particularly over potential consolidation of AI-model licensing and hardware distribution channels. OpenAI has pre-filed with the Committee on Foreign Investment in the U.S. to expedite approval.

What Comes Next?

2026 Launch Window: Public release of the first io-powered AI device is slated for mid-2026, pending final product validation and certification.
Integration with GPT: Devices will run on-device generative models for privacy-sensitive queries, falling back to GPT-5 Turbo in the cloud for heavier tasks.
Developer Ecosystem: OpenAI will open an io SDK by Q4 2025, inviting third parties to build specialized AI-hardware apps for everything from healthcare diagnostics to immersive education.

Conclusion

By uniting Jony Ive’s design mastery with OpenAI’s AI engine, this $6.5 billion deal could redefine how we interact with artificial intelligence—shifting from screens to bespoke, purpose-built devices. As competitors like Google and Meta race to embed AI in phones, glasses, and speakers, OpenAI’s choice to lean on world-class industrial design may prove the differentiator that turns generative AI from a novelty into everyday reality.

🔍 Top 3 FAQs

1. What exactly did OpenAI acquire?
OpenAI is buying io, Jony Ive’s AI-hardware startup, in an all-stock transaction valued at $6.5 billion—bringing io’s 55-member team and LoveFrom’s design leadership into the fold.

2. When will we see the first AI device?
The initial hardware, prototyped in three distinct form factors (wearable assistant, desktop hub, companion robot), is slated for a mid-2026 launch, after final testing and certification.

3. How will these devices work?
They’ll run lightweight generative models locally for privacy and instant replies, and seamlessly switch to GPT-5 Turbo in the cloud for complex tasks—offering a unified AI experience tailored by Ive’s industrial design.