OpenAI has announced a nearly $6.5 billion deal to acquire the mysterious startup io, founded by legendary designer Jony Ive, who has worked on most of Apple’s current products. It is the largest acquisition in OpenAI’s history and paves the way for it to enter artificial intelligence-based devices, Bloomberg reports.
The deal consists of $5 billion in additional OpenAI shares in exchange for io, with the remainder coming from a partnership formed late last year when OpenAI acquired a 23% stake in io. The transaction is expected to close this summer, subject to regulatory approvals.
OpenAI CEO Sam Altman said the acquisition of io would allow the company to create a "future device" optimized for artificial intelligence. "AI is a huge leap in what humans can do, and it requires a new form of computing," he said.
Jony Ive, who was responsible for the design of the iPhone, iPad and Apple Watch from 1996 to 2019, also expressed optimism: "Everything I've learned over 30 years has brought me to this point. Our collaboration will produce a series of products that have never been seen before."
Once the deal closes, OpenAI will be joined by about 55 hardware engineers, developers and manufacturing specialists from io’s San Francisco office. These teams, many of whom have worked on iconic Apple products, will develop new AI devices. According to Altman and Ive, the first sketches of the new devices have been in development for more than two years, with the first of them scheduled to launch in 2026.
Another of Ive’s businesses, design studio LoveFrom, will remain independent but will take on all of OpenAI’s design work, including working on the ChatGPT interface. Ive said LoveFrom has several former Apple designers who helped create the interface for the Mac and iPhone operating systems. LoveFrom will continue to work with companies like Ferrari and Airbnb, but will not be taking on any new major clients.
The startup, io, has previously received funding from Emerson Collective, Sutter Hill Ventures, Thrive Capital, Maverick Capital, and others. Ive founded io last year with former Apple employees Scott Cannon, Evans Henkey, and Tan Tan.
The announcement of the deal sent Apple shares down 2.3% as analysts noted that it intensifies competition in the AI device segment, where Apple seeks to become a leader.
OpenAI, valued at around $300 billion, is growing not only as a provider of cloud AI services but also through strategic acquisitions. In addition to io, the company is also considering buying AI company Windsurf for around $3 billion. In addition, OpenAI has appointed former Instacart CEO Fiji Simo as head of applications so that Altman can focus on its hardware business expansion strategy.