Sources: in recent weeks, OpenAI discussed acquiring io Products, a startup Sam Altman has been working on with Jony Ive to develop an AI device, for $500M+
OpenAI in recent weeks discussed acquiring a startup its CEO Sam Altman has been working on with ex-Apple designer Jony Ive's studio …
Context & Ripple Effects
The reported talks extend a hardware effort that Altman and Ive had been exploring since 2023, when they were discussing a new AI hardware device. By 2024, the project was also reported to be seeking outside backing, with Ive aiming to raise up to $1 billion for the startup in funding discussions.
An acquisition discussion would shift the effort from a founder-and-designer collaboration toward a potentially owned OpenAI product program. That matters because it could combine OpenAI’s model development with Ive’s design studio at the earliest stage of defining a new device category.
First-order effects
- OpenAI and io Products would need to determine whether to pursue an acquisition rather than keep the device venture separately financed and governed.
- A deal at the reported $500M-plus level would give OpenAI a more direct claim on the project’s device roadmap and the Altman-Ive collaboration.
Second-order effects
- A tighter OpenAI-io relationship could make it harder for outside backers to gain exposure to the device effort, after earlier reports of fundraising conversations.
- It would put pressure on other AI companies to decide whether their distribution strategy requires proprietary hardware, rather than relying solely on existing consumer devices.
Third-order effects
- If leading model providers increasingly bring industrial design and device development in-house, AI competition could shift from model access alone toward control of the interface through which users reach those models.
- The outcome remains uncertain: a hardware push can create a distribution advantage, but it also adds product execution and supply-chain demands that software labs have historically avoided.
The trend: This is one data point in the move by AI labs to seek durable distribution advantages through purpose-built hardware and design talent.