OpenAI has announced today its intention to acquire io Products Inc., a consumer electronics startup led by former Apple Chief Design Officer Jony Ive.
The deal values the one-year-old io Products at $6.5 billion. OpenAI, which already owns 23% of the startup through early investments, will purchase the remaining 77% stake with stock worth $5 billion. The transaction is expected to close this summer.
In a post on X, OpenAI CEO Sam Altman wrote that Ive would support ChatGPT developers in their efforts to "create a new generation of AI-powered computers."
During his nearly 30-year tenure at Apple, Ive played a pivotal role in designing many iPhone, iPad, and MacBook models. He also contributed to developing the blueprint for the company's $5 billion headquarters building. After leaving in 2019, Ive founded LoveFrom Inc., a design studio whose clients include Airbnb Inc. and Ferrari.
The executive established io Products last year. Its team reportedly comprises about 55 engineers, scientists, researchers, physicists, and product development professionals. These employees will join OpenAI post-acquisition, with Ive assuming "deep creative and design responsibilities" for both OpenAI and io.
LoveFrom, the design studio founded by Ive after leaving Apple, is also reportedly involved in this deal. It will receive shares of OpenAI, and the ChatGPT developer will become a customer of the studio. Last year, The New York Times reported that companies pay LoveFrom up to $200 million annually to support their product design initiatives.
According to The Wall Street Journal, OpenAI partnered with LoveFrom two years ago to develop a new consumer device. Sources say this device aims to help users "move beyond screens." One product design explored by the company is a pair of headphones.
When acquisition rumors first emerged in April, The Information reported that io Products was developing an AI-enabled consumer device without a display. Some sources suggested the device resembles a smartphone, while others indicated io Products is also considering smart home products.
Bloomberg reports that the first devices developed through OpenAI's collaboration with Ive are planned for release next year. The former Apple executive is also expected to contribute to other parts of AI business operations, including future versions of ChatGPT.
This acquisition follows another multibillion-dollar deal signed by OpenAI just weeks ago. Earlier this month, it acquired Windsurf, a development tools startup, reportedly for $3 billion. Windsurf, formerly known as Exafunction Inc., offers a code editor that uses AI to automate various programming tasks.
