OpenAI acquires Jony Ive's hardware startup io

Background

io was an AI hardware startup founded by the designer Jony Ive ^[2][3]. In the AI industry, "hardware" usually describes a physical device whose main function depends on an AI model — one that runs on the device itself or is reached over a network — rather than a general-purpose computer. Building such a device is a different kind of work from shipping software: it involves industrial design, manufacturing and supply chains, and the product has to make sense to someone who is not sitting at a keyboard.

The announcement

On 21 May 2025, OpenAI announced that it would acquire io ^[1][3]. The deal valued io at about $6.5 billion ^[1][2][3]. The transaction was expected to close in the summer of 2025 ^[3].

Key details

Ive, who founded io, was to lead hardware and design efforts at OpenAI ^[2][3]. Sam Altman said that Ive would support efforts to create a new generation of AI-powered computers ^[3]. OpenAI had not released specific product details at the time of the announcement ^[2]. The Wall Street Journal reported that the gadget was meant to move consumers beyond screens ^[3].

The structure of the deal was unusual in one respect. It was an all-stock transaction: OpenAI already held a stake in io, and it paid $5 billion in shares for the remaining 77% of the company ^[3]. Paying in shares rather than cash means the sellers receive equity in OpenAI itself, so the value they end up with is tied to how OpenAI's shares are valued rather than to a fixed sum handed over at closing.

Why it matters

The acquisition marks a move by OpenAI into physical products. Until the announcement, the company's public output had been software; the deal brings a hardware team and a designer into the organisation, with Ive responsible for hardware and design ^[2][3]. Altman's description of the goal — a new generation of AI-powered computers ^[3] — frames the work as building computers rather than accessories.

The second signal is the intended form of the product. The Wall Street Journal reported that the gadget was meant to move consumers beyond screens ^[3], and OpenAI had not released specific product details at the time ^[2]. Screens are where most interaction with AI assistants has taken place; a device designed to move users past the screen would change what using an assistant is like, and would have to solve interaction problems that a phone or a laptop solves for free.

The third is the price and the timing. A valuation of about $6.5 billion ^[1][2][3], an announcement on 21 May 2025 and an expected close in the summer of 2025 ^[3] put the deal on a short schedule, and the all-stock form ^[3] keeps the transaction inside the company's own equity rather than drawing on cash.