Former Apple executive Jony Ive partners with OpenAI in a $6.5 billion acquisition of an AI devices startup

Jony Ive Joins OpenAI in Major Acquisition

Renowned iPhone designer Jony Ive is set to join OpenAI following the acquisition of his artificial intelligence hardware startup, IO, which was purchased by the creators of ChatGPT in a significant deal worth nearly $6.5 billion, as announced on Wednesday.

This acquisition marks the largest in OpenAI’s history, led by Sam Altman. Ive, who collaborated closely with Steve Jobs at Apple, gained fame for developing some of the company’s most iconic products.

As stated in a press release, Ive, who departed from Apple in 2019, aims to embrace “deep design and creative responsibility across OpenAI and IO” in this new role.

This collaboration positions OpenAI to directly compete with Apple, which still relies heavily on iPhone sales for the majority of its revenue.

IO is led by Tang Tan, a former Apple executive responsible for iPhone and Apple Watch design, along with Evans Hankey, who succeeded Ive as Apple’s chief designer before leaving in 2023. Both will be involved with OpenAI moving forward.

“I’m feeling that everything I’ve learned over the past 30 years has brought me to this point,” Ive remarked in a statement. “I’m both concerned and excited about the significant responsibilities ahead, but I am truly thankful for this chance to be part of such an essential collaboration.”

After the announcement, Apple’s stock dropped over 2%, with losses increasing as details of the collaboration emerged.

As part of the deal, OpenAI will pay $5 billion in shares, having held a stake in IO even before this acquisition. It’s anticipated that the transaction will conclude this summer, pending regulatory approval.

In an interview with Bloomberg, both Ive and Altman mentioned that their first product is expected to launch in 2026. Currently, there are 55 employees working at OpenAI under the IO brand, including software developers and hardware engineers.

“AI is a remarkable technology, but great tools require not only technology but also design and a deep understanding of people and the world,” Altman stated. “Johnny and his team are unparalleled in their meticulous attention to every detail in the process.”

Before this agreement, both Altman and Ive had already been collaborating on AI-centric devices since 2023, though there’s been quite a bit of debate over whether these devices would be considered smartphones, tablets, or something entirely new.

Recently, OpenAI reached a $300 billion valuation and finds itself in competition with companies like Google and Elon Musk’s Xai, leading the race in advanced AI development.