OpenAI buys ‘io’ for $6.4 billion to build new generation AI devices

On Wednesday, May 21st, OpenAI claimed that it has acquirediPhone designer Jony Ive’s AI devices startup— ‘io’ for about $6.4 billion in an all-equity deal. This decision comes mainly to establish the artificial intelligence company firmly in the world of hardware.

In a bold step toward its major hardware push, OpenAI has acquired the io startup for $6.4 billion, making it its largest acquisition to date.

‘io’ by Jony Ive

The startup was founded by legendary Apple designer Jony Ive in 2023, as part of a wider initiative to bring artificial intelligence into the physical world. Since then, io has been quietly building hardware meant to take full advantage of generative AI technologies.

The Merger Announcement

The declaration of OpenAI merging with io came through a joint blog post by OpenAI CEO Sam Altman and Jony Ive, who labelled this partnership deed as “a collab built upon friendship, curiosity and shared values.” According to them, their alliance has been two years in development, even though details on future products remain undisclosed.

The blog was captioned as “Tentative ideas and explorations evolved into tangible designs,” by the genius duo, signifying that OpenAI’s foray into hardware will no longer be a distant goal, but a forthcoming reality.

More about Jony Ive

Jony Ive is a former Chief Design Officer at Apple, and is celebrated and known for creating some of the most iconic Apple products — like the iPhone, iPod, MacBook Air, and Apple Watch.  After a 27-year long tenure, he finally bid farewell to Apple in 2019 and later launched LoveFrom; a creative collective encompassing designers, artists, architects, and engineers.

The startup io was formed under the LoveFrom canopy just a year ago, and had not publicly unveiled any products. oi’s acquisition by OpenAI marks a strategic move to plug into Ive’s unmatched design ethos.

‘io’ integration with OpenAI

After the acquisition process, the io team will merge with OpenAI’s research, engineering, and product divisions in San Francisco.

According to Bloomberg reports, even though Ive himself will not join OpenAI formally, his company will lead design across all OpenAI products, including the entire software.

It is also reported that Ive is designing LoveFrom’s headquarters in San Francisco, which might serve as a creative hub for the ongoing alliance with OpenAI.

Other Important Insights from OpenAI

·   Though OpenAI has not launched any hardware product yet, its moves signal strong intentions. CK Kalinowski, formerly of Meta’s AR glasses division, was recently hired to lead robotics and hardware efforts.

·   The company has also made interesting investments in robotics startup Physical Intelligence, to integrate general-purpose AI with the physical world.

·   OpenAI’s rapid growth is backed by deep funding. Today valued at $300 billion, the company secured $40 billion from SoftBank in March, while Microsoft holds a 49% stake after a $13 billion investment in 2023.

·   OpenAI acquired AI coding tool Windsurf for $3 billion and purchased real-time database startup Rockset last summer.

·   OpenAI has expanded aggressively, evolving from a software-focused research lab into a full-stack AI powerhouse, covering both digital and physical domains.

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