OpenAI is set to acquire hardware startup io Products—founded by former Apple design chief Jony Ive—for nearly US$6.5 billion, marking a bold entry into the consumer hardware market. The deal, expected to be finalized soon, underscores OpenAI's ambition to redefine human-AI interaction through a revolutionary new device slated for release by the end of 2026.
Reports, including The Wall Street Journal and CNBC, indicate that the mysterious AI device, developed in partnership with Ive since late 2023, has become central to OpenAI's long-term product vision. During a recent all-hands meeting, OpenAI CEO Sam Altman described the device as the company's "most significant product," likening its importance to Apple's MacBook Pro and iPhone. He further suggested it could ultimately generate US$1 trillion in value.
The new device breaks away from traditional screens and user interfaces, blending portability and environmental awareness to offer a more human-centric experience. It's compact enough to fit in a pocket or rest discreetly on a desk and designed to sense and respond to its surroundings—indicating a shift away from the smartphone and augmented reality models that have dominated consumer tech for the past decade.
In a blog interview, Altman and Ive shared that the AI device is just the first in a planned "family of devices." Altman praised Apple's seamless hardware-software integration, while Ive described their collaboration as reminiscent of his close partnership with Steve Jobs. The design and product direction were finalized by autumn 2024, and Ive's team is already working with suppliers to hit a target of 100 million units—faster than any known competitor.
Initially conceived as a joint venture, Altman later pushed for a full acquisition of io Products after realizing how essential the hardware would be to OpenAI's ecosystem. He reportedly urged employees to keep the project under wraps to avoid tipping off rivals.
The acquisition comes as OpenAI navigates mounting losses—forecasted to total US$44 billion between 2023 and 2028. The company aims to become profitable by 2029 and sees hardware as a crucial step toward that goal, especially as it faces growing competition from Apple, Google, and other tech giants. The timing of the announcement, just after the opening of Google's I/O developer conference, signals OpenAI's readiness to challenge the incumbents directly.
Altman has even floated the idea of providing ChatGPT subscribers with dedicated AI computers, suggesting a future where software is not confined by browsers or operating systems controlled by other tech firms. He noted that today's devices constrain AI, citing the slow, command-based interactions that define most current AI usage. His proposed new hardware aims to eliminate that friction, enabling a seamless, contextual interface that better integrates AI into daily life.
OpenAI's ambition aligns with growing speculation about the future of smartphones themselves. Apple executive Eddy Cue recently suggested that devices like the iPhone may become obsolete within a decade. Previous AI gadgets such as Humane's Ai Pin and Rabbit's R1 failed to gain traction—devices Ive dismissed as "terrible."
Despite the bold vision, questions remain about whether OpenAI can deliver on its promise. While its upcoming device has the potential to challenge Apple's hardware dominance, its success will depend on whether it can truly redefine how users experience AI in their everyday lives.
Article edited by Jack Wu
