OpenAI has announced the acquisition of io Products, a hardware startup co-founded by former Apple Chief Design Officer Jony Ive, in an all-equity deal valued at $6.5 billion. This strategic move marks OpenAI's significant entry into hardware development, aiming to create a new family of AI-integrated devices.

Jony Ive, renowned for designing iconic Apple products like the iPhone and Apple Watch, co-founded io Products in 2024 alongside former Apple designers Tang Tan and Evans Hankey. The startup focused on developing AI-enabled devices that offer alternatives to traditional smartphones, emphasizing designs that are "less socially disruptive than the iPhone." Ive's design firm, LoveFrom, has been collaborating with OpenAI since 2023 on AI-focused products.

OpenAI previously held a 23% stake in io Products and will now acquire the remaining 77% for $5 billion in equity, bringing the total valuation to $6.5 billion. The acquisition includes io's team of 55 employees, who will integrate with OpenAI's existing teams to develop innovative hardware solutions for the artificial general intelligence (AGI) era. Ive will continue to contribute his design expertise as a consultant through LoveFrom, maintaining his independent studio.

This acquisition aligns with OpenAI's vision to redefine human-computer interaction beyond traditional smartphones. By integrating hardware and software, OpenAI aims to create a family of products tailored for the AGI era. The first device resulting from this collaboration is expected to launch in 2026, though specific details have not been disclosed.

The move reflects a growing interest in AI-integrated hardware, despite recent challenges faced by similar ventures. For instance, Humane's AI Pin experienced underwhelming performance in the market. OpenAI's entry into hardware development positions it as a competitor to tech giants like Apple and Google, who have established ecosystems of hardware and software.

Following the announcement, Apple's stock declined by over 2%, indicating investor concerns about increased competition in the AI device space. As of May 21, 2025, Apple's stock price stood at $205.44, reflecting a decrease of $1.42 from the previous close.

Ive has previously expressed concerns over the societal impacts of smartphones, signaling intent to help design more thoughtful alternatives. The collaboration between OpenAI and Ive aims to create devices that integrate AI seamlessly into daily life while minimizing social disruption.

This acquisition signifies a pivotal moment in the tech industry, as OpenAI ventures into hardware development with the expertise of Jony Ive and his team. The collaboration holds the potential to redefine human-computer interaction and set new standards for AI-integrated devices in the AGI era.