OpenAI has made a bold entrance into the consumer hardware space with its acquisition of io Products, a startup co-founded by celebrated Apple designer Jony Ive. Valued at $6.5 billion in stock, the deal highlights OpenAI’s ambitions to extend its artificial intelligence capabilities beyond software and into physical products that redefine how people interact with AI.
In a joint announcement made via video on OpenAI’s blog, CEO Sam Altman and Jony Ive described the acquisition as a crucial step toward creating hardware that matches the power and potential of generative AI. Ive will join OpenAI as Creative Head, taking the lead in shaping a new class of devices designed specifically for the AI era.
From Software Powerhouse to Hardware Visionary
The acquisition signals a major shift in OpenAI’s strategy. Having dominated the AI software landscape with tools like ChatGPT, the company now aims to challenge hardware platforms long ruled by Apple’s iOS and Google’s Android. Altman and Ive emphasized that current devices—smartphones and laptops included—are “decades old” and no longer fit for the transformative possibilities that AI can offer.
“It’s just common sense to ask whether there’s something beyond the legacy devices we all rely on,” Altman said in the statement, hinting at a dramatic reimagining of the consumer tech landscape.
While the prototype devices under development remain under wraps, Altman described one such product as “the coolest piece of technology the world will have ever seen.” However, the company offered no specific technical details or timeline for release.
A $6.5 Billion Bet on the Future of Design
While OpenAI did not officially disclose financial terms, sources close to the deal valued the acquisition at $6.5 billion, based on OpenAI’s internal valuation of $300 billion. The deal is structured entirely in OpenAI stock.
Importantly, OpenAI already owned a 23% equity stake in io Products before the acquisition. The startup, launched a year ago by Jony Ive, evolved from his design firm LoveFrom, which had been working quietly with OpenAI for two years to develop AI-centric hardware.
This long-standing partnership is now formalized, with Ive leading a new vision for consumer devices that blend iconic design with cutting-edge AI models.
Why This Acquisition Matters
OpenAI’s foray into hardware underscores a broader trend among AI firms seeking to build their own platforms. As AI becomes increasingly central to consumer and enterprise technology, controlling the hardware layer provides a key competitive edge.
“OpenAI is interested in owning the next hardware platform so they don’t have to sell their products through Apple iOS or Google’s Android,” explained Gil Luria, a tech analyst at D.A. Davidson. “It’s the same ambition Meta has with its Quest headsets and smart glasses.”
Apple’s relatively slow rollout of AI features compared to Android competitors highlights the strategic importance of this move. Following the announcement, Apple’s stock dropped over 2%, signaling investor concern that Apple may be falling behind in the AI race.
OpenAI’s approach is similar to that of Tesla, Meta, and Google, all of which have invested heavily in hardware platforms to complement their AI capabilities. However, OpenAI brings something unique: a generative AI system widely adopted across industries and now poised to evolve beyond software.
Leadership Moves Reflect Hardware Ambitions
Beyond Jony Ive, OpenAI has made several other high-profile hires to boost its hardware and robotics efforts. In late 2024, the company brought on Caitlin Kalinowski, the former head of Meta’s augmented reality (AR) division. She now oversees OpenAI’s robotics and consumer hardware division, a role that includes integrating AI with emerging physical platforms.
Kalinowski’s track record at Meta, especially her work on the Orion AR glasses project, suggests OpenAI is planning to release wearables or other AR/VR-enabled devices. Her presence further validates the company’s ambition to lead in the hardware space, not just support it.
OpenAI’s Broader Acquisition Strategy
The acquisition of io Products is the latest in a string of strategic deals OpenAI has made to expand its technological capabilities.
Earlier this year, the company acquired Windsurf, an AI-assisted coding platform formerly known as Codeium, in a $3 billion deal. Windsurf’s tools help developers write and debug code using natural language, boosting OpenAI’s push to dominate AI-powered software development.
In addition, OpenAI purchased Rockset, a real-time analytics database company. This acquisition strengthens OpenAI’s backend infrastructure, particularly in areas of fast data processing and retrieval, which are critical for training advanced AI models and providing instant responses to users.
Together, these acquisitions form a tightly aligned strategy: own the data, own the software, and now, with io Products, own the hardware too.
Looking Ahead: The Next AI Platform
With these moves, OpenAI positions itself as not just a software company or AI model provider, but as an end-to-end technology platform for the future. By combining advanced generative models with elegant hardware design and robust infrastructure, the company hopes to redefine how humans interact with machines.
This vertical integration mirrors Apple’s historical strategy, but with one major difference: OpenAI leads with AI, not hardware. The potential implications could be vast—spanning everything from smart home devices to wearables, and even AI-native operating systems that bypass today’s app-based ecosystems.
If successful, OpenAI could shape the next decade of consumer technology, just as Apple did with the iPhone.
Final Thoughts
OpenAI’s acquisition of io Products is more than a headline-grabbing tech deal. It’s a clear signal that the company plans to reshape the way people live and work in the AI-driven future. With visionary leadership, strategic hires, and deep investments in both software and hardware, OpenAI appears set to challenge not only today’s tech giants—but also the very platforms they’ve built their empires upon.
