In a landmark deal that signals a significant shift in the artificial intelligence landscape, OpenAI announced today it will acquire io, the hardware-focused AI startup co-founded by former Apple design chief Jony Ive. The acquisition, valued at approximately $5 billion in stock, underscores OpenAI’s ambition to move beyond software and into the physical product realm.

A Marriage of Design and AI

The partnership between OpenAI CEO Sam Altman and Jony Ive has been in development for two years, beginning as a collaboration that evolved into something more substantial. “I have a growing sense that everything I have learned over the last 30 years has led me to this place, and to this moment,” Ive stated in the announcement.

The acquisition, expected to close this summer, values io at $6.4 billion, with OpenAI paying $5 billion in stock based on its most recent valuation of $300 billion. The deal brings together OpenAI’s expertise in artificial intelligence with Ive’s renowned design capabilities, creating what industry observers view as a potentially revolutionary combination.

The Team Behind the Vision

Accompanying Ive in this venture are several former Apple design luminaries, including Tang Tan, Scott Cannon, and Evans Hankey, who led Apple’s design department after Ive’s departure in 2019. Mark Newson, a longtime collaborator of Ive’s, is also part of the team. Under the terms of the deal, Hankey, Tan, and Cannon will join OpenAI, while Ive’s design consultancy LoveFrom will remain independent but take over design responsibilities at OpenAI.

The newly formed hardware division at OpenAI will be led by Peter Welinder, integrating io’s 55 employees into the AI company’s structure. This strategic move positions OpenAI to develop what Altman describes as a product that has “never happened before in consumer hardware.”

A New Computing Paradigm

Both Altman and Ive have expressed ambitious visions for their collaboration. Altman emphasized that AI’s technological leap requires “a new kind of computing form factor to get the maximum potential out of it,” while Ive suggested their relationship would “yield products and products and products.”

The announcement comes at a time when the tech industry is seeking new interfaces for AI beyond traditional screens and keyboards. The partnership aims to create a family of AI devices that could potentially redefine how humans interact with artificial intelligence.

“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,” noted the companies in their joint statement, highlighting the depth of expertise behind this new venture.

Market Implications

The acquisition has sent ripples through the tech industry, with Apple’s stock showing vulnerability following the announcement. The move potentially positions OpenAI as a hardware competitor to established tech giants, including Apple, where Ive played a pivotal role in designing iconic products like the iPhone, iPad, and MacBook.

The deal represents one of the largest acquisitions in the AI sector and demonstrates how software-focused AI companies are increasingly recognizing the importance of custom hardware in delivering next-generation AI experiences.

As the collaboration between these two visionaries moves forward, the tech world will be watching closely to see what emerges from this fusion of OpenAI’s cutting-edge AI capabilities and Ive’s legendary design philosophy—a combination that promises to deliver what the companies describe as products that are “optimistic and hopeful… inspiring… [and] made everyone smile.”