OpenAI Acquires Jony Ive’s Startup for $6.5B, Names iPhone Design Legend Creative Head

May 22, 2025, San Francisco, CA – OpenAI has acquired io Products, the hardware startup co-founded by former Apple design icon Jony Ive, in a $6.5 billion all-stock deal, positioning the AI giant to redefine consumer devices for the generative AI era. Announced on May 21, the acquisition brings Ive onboard as OpenAI’s creative head, leveraging his expertise behind the iPhone’s iconic design to develop innovative AI-driven hardware. The move, valued at OpenAI’s $300 billion valuation, follows two years of collaboration between Ive’s LoveFrom and OpenAI, aiming to surpass legacy devices like smartphones.

As competitors like Humane AI falter with underperforming AI gadgets, OpenAI’s bold strategy signals a bid to control the next hardware platform, bypassing reliance on Apple’s iOS or Google’s Android.

A Vision for AI-Driven Hardware

The acquisition merges OpenAI’s ChatGPT technology with Ive’s design prowess, targeting devices tailored for generative AI’s high computing demands. OpenAI CEO Sam Altman hinted at a prototype, describing it as “the coolest piece of technology the world will have ever seen.” Unlike smartphones, which Altman and Ive have called “decades-old legacy products,” the envisioned devices aim to integrate AI seamlessly into daily life.

Real-time data shows OpenAI’s valuation has surged 15% in 2025, reflecting investor confidence in its hardware ambitions. The deal, which builds on OpenAI’s prior 23% stake in io Products, underscores a strategic push to rival tech giants, with industry analysts noting a 20% uptick in AI hardware startup funding this year.

Did You Know?
Jony Ive’s design influence at Apple contributed to over 1 billion iPhone sales globally, shaping the modern smartphone era.

Challenges in the AI Hardware Landscape

The path to AI-driven devices is fraught with challenges, as evidenced by Humane AI’s AI Pin, which faced criticism for poor battery life and limited functionality. OpenAI’s acquisition aims to avoid such pitfalls by combining Ive’s user-centric design philosophy with robust AI infrastructure. Apple, meanwhile, has lagged in deploying its Apple Intelligence suite, with shares dropping 2.3% on May 21 amid news of the deal.

Social media buzz highlights excitement for Ive’s return to consumer tech, with discussions of “AI-powered iPhone successors” trending globally. OpenAI’s move mirrors Meta’s Quest and Ray-Ban efforts, aiming to own the next hardware platform and reduce dependency on third-party ecosystems.

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Strategic Implications and Industry Impact

“This acquisition is about controlling the AI hardware future,” said D.A. Davidson analyst Gil Luria, noting OpenAI’s intent to bypass iOS and Android gatekeepers. The deal positions OpenAI to compete with tech titans while addressing consumer demand for intuitive AI experiences.

Industry reports indicate a 25% rise in generative AI device patents in 2024, signaling a race to innovate. However, OpenAI must navigate technical hurdles like power efficiency and scalability, areas where competitors have struggled. With Ive at the helm, the company is poised to redefine how users interact with AI, potentially reshaping the $1.5 trillion consumer electronics market.