In a landmark all-equity deal valued at nearly $6.5 billion, OpenAI is set to acquire io, the stealthy hardware startup co-founded by former Apple design chief Jony Ive, along with ex-Apple engineers Scott Cannon, Evans Hankey, and Tang Tan. While Ive himself won’t be joining OpenAI as an employee, his design studio LoveFrom will remain independent and assume responsibility for the design of all OpenAI products—both hardware and software—marking a dramatic expansion of OpenAI’s ambitions into consumer devices.

OpenAI CEO Sam Altman and Jony Ive have quietly been collaborating for over two years on what they describe as “a totally new kind of thing,” culminating in this $6.5 billion acquisition of io. The transaction, which is expected to close in summer 2025 pending regulatory approval, will integrate roughly 55 hardware engineers, software developers, and manufacturing experts into OpenAI’s ranks, while LoveFrom will receive a stake in OpenAI and oversee the design of its entire product suite.

Among the io team joining OpenAI are Cannon, Hankey, and Tan—veterans of Apple’s design labs who collaborated with Ive on iconic products such as the iPhone and Apple Watch. In a joint statement, Ive and Altman highlighted their shared history: “Many of us have worked closely for decades. The io team, focused on developing products that inspire, empower and enable, will now merge with OpenAI to work more intimately with the research, engineering and product teams in San Francisco.”

Both executives have been openly critical of recent AI gadget flops like the Humane Pin and Rabbit R1, with Ive calling them “very poor products” that lack fresh product thinking. Altman echoed this sentiment, emphasizing that OpenAI’s first hardware effort “is not intended to replace smartphones—just as smartphones didn’t kill laptops—but rather to introduce an entirely new category of AI-native device.”

Although precise specifications remain under wraps, insiders report that prototypes have already impressed the leadership. “Jony recently gave me one of the prototypes of the device for the first time to take home, and I’ve been able to live with it,” Altman said. “I think it is the coolest piece of technology that the world will have ever seen.” Ive himself described the project as the culmination of his 30-year career: “I have a growing sense that everything I have learned over the last 30 years has led me to this moment.” The team expects to launch its first product in 2026, with ambitions to ship tens of millions of units annually.

Despite io’s absorption into OpenAI, LoveFrom will continue to operate autonomously. As part of the agreement, OpenAI becomes a key client, tapping LoveFrom’s expertise not only for io-derived hardware but across its software interfaces—including future versions of ChatGPT and other services. This setup allows Ive’s studio to maintain its broader portfolio, which includes projects for luxury brands and cultural institutions.

Venturing into consumer hardware puts OpenAI in direct competition with tech giants like Apple and Google—companies with decades of experience in manufacturing scale, distribution, and retail partnerships. Analysts note that large-scale hardware rollouts can strain balance sheets; OpenAI has projected operating losses into the late 2020s even as it invests heavily in compute and R&D. Yet Altman remains undeterred: “AI is an incredible technology, but great tools require work at the intersection of technology, design, and understanding people and the world. No one can do this like Jony and his team.”

For end users, the promise is twofold: seamless AI integration and beautifully crafted devices that blend form and function. Early hints suggest a sleek, perhaps screenless wearable or desk-bound gadget, one that leverages OpenAI’s latest models to deliver contextual assistance—everything from real-time language translation to environment-aware prompts—without the friction of traditional UIs. If successful, this could usher in a new era of everyday AI companions, akin to the paradigm shifts sparked by the iPod, iPhone, and smartwatch.

As the deal enters its final regulatory hurdles, the tech world will be watching how OpenAI’s bold foray into hardware unfolds. Between Altman’s data-driven engineering culture and Ive’s obsessive design ethos, this collaboration may well define the next generation of computing. But, as both leaders concede, turning a visionary prototype into a mass-market product remains an immense challenge—and one that could reshape our relationship with AI for years to come.