OpenAI Drops $6.4B Bombshell: Jony Ive’s Hardware Startup io Joins the AI Arms Race
Silicon Valley’s favorite AI lab just went full Tony Stark—snagging Apple’s design legend to build the next generation of AI hardware. Because what’s a $6.4 billion war chest for if not buying your way into the physical world?
The move smacks of desperation—or genius—as software-first players scramble to control the entire tech stack. Ive’s minimalist magic meets ChatGPT? Either we’re getting the iPhone of AI devices…or another overpriced paperweight for VCs to fawn over.
Meanwhile, Wall Street analysts weep into their spreadsheets. That’s a whole crypto-market-cap worth of cash for a designer who hasn’t shipped a hit since the Obama administration.
Integration into AI and product teams
In a joint statement, OpenAI CEO Sam Altman and Ive said the io team will relocate to San Francisco to work closely with OpenAI’s research and product teams.
The io startup, founded a year ago by Ive and former Apple colleagues Scott Cannon, Tang Tan, and Evans Hankey, was previously operated as part of LoveFrom.
OpenAI currently owns a 23% stake in io, contributing $1.4 billion to the deal’s valuation. The remaining $5 billion will be transferred in equity.
The transaction will bring io’s device-focused team in-house, adding industrial design capacity to OpenAI’s portfolio. In a statement shared on X, Altman described Ive as “the greatest designer in the world.”
The deal comes weeks after OpenAI agreed to acquire Windsurf, an AI coding assistant, for $3 billion.
Hardware investments
Alongside its in-house efforts, OpenAI has invested in Physical Intelligence, a San Francisco-based robotics startup that raised $400 million in 2024 at a valuation of $2.4 billion.
That round included participation from Amazon founder Jeff Bezos. Physical Intelligence is building general-purpose AI to operate in physical environments, suggesting OpenAI’s broader intent to pair software with tactile systems.
The acquisition of io reinforces that direction. While OpenAI did not disclose specific products, the blog post referenced devices that “inspire, empower, and enable,” and emphasized IO’s mission to translate AI capabilities into consumer-oriented FORM factors.
OpenAI’s purchase of io highlights its strategy to build out physical interfaces for its models, as the competitive field in generative AI continues to widen with entries from Google, Anthropic, and xAI.
