OpenAI acquisition of io
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Last reviewed
May 31, 2026
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The OpenAI acquisition of io is the deal under which OpenAI bought io Products, the artificial intelligence hardware startup co-founded by former Apple design chief Jony Ive together with OpenAI chief executive Sam Altman. OpenAI announced the agreement on May 21, 2025, and described it as an all-equity transaction that valued io at roughly $6.5 billion [1][2]. The companies completed the merger on July 9, 2025 [3][4]. It stands as OpenAI's largest acquisition to date and marks the company's most direct move into consumer hardware, pairing the maker of ChatGPT with one of the best known product designers of the smartphone era [1][5].
The deal folded io's engineering and design team into OpenAI while leaving Jony Ive and his independent design firm LoveFrom outside the corporate structure. Ive took on broad creative and design responsibilities across OpenAI, and the stated goal was a family of dedicated AI devices, starting with a screenless, pocket-sized companion that the two men framed as a new category of personal computer rather than a replacement for the phone [2][6]. The arrangement drew heavy press coverage, a nine-minute promotional film, and within weeks a trademark dispute with a startup called iyO that forced OpenAI to pull its marketing and eventually drop the "io" name [7][8].
OpenAI and io agreed to merge in a transaction structured entirely in OpenAI equity, with no cash component reported [2][9]. OpenAI already held a stake in io from an earlier investment, so the headline valuation and the new money were not the same number. According to reporting around the announcement, OpenAI had taken a roughly 23 percent stake in io in late 2024, which means the additional consideration to acquire the rest of the company was smaller than the full valuation. Several outlets put that additional consideration at about $5 billion in OpenAI stock [9][10]. The total implied valuation of around $6.5 billion is the figure OpenAI and most coverage used to describe the deal, though a few early reports cited a slightly lower figure of about $6.4 billion [2][5].
io Products was founded in 2024 by Jony Ive along with three other Apple veterans: Scott Cannon, Evans Hankey, and Tang Tan. Hankey had briefly led industrial design at Apple after Ive left in 2019. Before the OpenAI deal, io had raised about $225 million from investors that reportedly included Sutter Hill Ventures, Emerson Collective, SV Angel, Maverick Ventures, and Thrive Capital [3][11]. At the time of the acquisition io had a staff of around 55 people, described as engineers, scientists, researchers, physicists, and product development specialists, all of whom joined OpenAI when the merger closed [9][3].
The table below summarizes the headline terms as reported around the announcement and the July close.
| Item | Detail |
|---|---|
| Announced | May 21, 2025 [1][2] |
| Completed | July 9, 2025 [3][4] |
| Structure | All-equity (OpenAI stock) [2][9] |
| Valuation of io | About $6.5 billion (some early reports said about $6.4 billion) [2][5] |
| Prior OpenAI stake | Reported around 23 percent, taken in late 2024 [9][10] |
| Additional consideration | Reported around $5 billion in stock [9][10] |
| io founded | 2024 by Jony Ive, Scott Cannon, Evans Hankey, Tang Tan [3][11] |
| io headcount | About 55, all joined OpenAI [9][3] |
| Status | OpenAI's largest acquisition to date [1][5] |
Jony Ive spent more than two decades at Apple, where he led the design of products including the iMac, the iPod, and the iPhone, before leaving in 2019 to start LoveFrom, which he calls a creative collective. The structure of the OpenAI deal kept that firm separate. OpenAI acquired io, the hardware company, but LoveFrom stayed independent and retained its other clients, with OpenAI becoming a LoveFrom client rather than its owner [3][6].
Within that arrangement Ive took on what OpenAI described as deep creative and design responsibilities across both OpenAI and io [2][6]. Reporting at the time noted that this extended beyond the planned hardware to design work for OpenAI more broadly, including its software [9]. Altman and Ive had been working together on the device idea for roughly two years before the public announcement, and the September 2024 reporting that first surfaced the collaboration described an effort to build an AI hardware device that would be less socially disruptive than the iPhone [6][12].
The two presented the merger as a meeting of complementary strengths, OpenAI supplying the models and Ive supplying the industrial design and product instincts. In the announcement materials Ive said recent AI gadgets had fallen short, and he was blunt about the field, describing earlier products as poor and saying there had been an absence of new thinking in them, a comment widely read as a reference to the Humane AI Pin and the Rabbit R1 [13][5].
The public reason for the deal is hardware. Altman and Ive said they wanted to build a family of AI-native devices, and the first of these became the most discussed unknown product in consumer technology through 2025 and into 2026. Based on reporting, the first device is meant to be pocket-sized and screenless, with microphones and cameras that let it perceive a user's surroundings so it can act on context rather than waiting for taps on a display [6][14].
Altman framed the product to staff as a "third core device," something a person would keep alongside a laptop and a phone rather than instead of them [14]. The pitch leaned on the idea of reducing screen time instead of adding another screen. Altman reportedly told employees that OpenAI aimed to ship 100 million of the devices, and that it hoped to reach that number faster than any company had shipped 100 million of a new product before [15][16]. He also suggested the device would be attractive enough that a user might not want to hide it in a case [14].
The timeline has moved. At announcement the companies talked about a first device arriving in 2026 [2][9]. Later reporting indicated the launch was slipping toward 2027, with one account citing a court filing that the device would not ship earlier than February 2027 [17][14]. Reports attributed the delay to unresolved questions about the device's personality, data privacy, and the computing infrastructure needed to support it [14]. In late 2025 OpenAI executives said the company had working prototypes and expected to reveal the device within about two years [18].
Reporting has also pointed to a broader hardware roadmap beyond the first companion. The Information described a team that grew past 200 people working on additional products, including a smart speaker with a camera, smart glasses, and other devices, with those reportedly targeted for years after the first launch [14][17]. Internal codenames surfaced in some reports, including "Sweetpea" for a small audio-style device roughly the size of an iPod shuffle [17].
The "io" name created a legal problem almost immediately. A startup called iyO, which spun out of X, the moonshot lab once part of Alphabet, and which builds custom-fitted earpieces for interacting with AI and audio by voice, said the io brand was confusingly similar to its own. iyO filed a trademark infringement suit in the U.S. District Court for the Northern District of California, naming OpenAI, io Products, Sam Altman, and Jony Ive's studio, with the complaint filed in early June 2025 [7][19].
A federal judge granted iyO a temporary restraining order in June 2025, and OpenAI responded by pulling the nine-minute announcement video and other materials that used the io name from its website and YouTube, replacing the page with a note about the court order [8][7]. According to reporting, OpenAI argued the claim was weak and noted that iyO had previously approached OpenAI seeking investment, with Altman calling the suit silly [20]. iyO later amended its case to add allegations including trade secret theft [21].
The dispute moved through the courts over the following months. Reporting indicates the Ninth Circuit affirmed the restraining order in December 2025, and that the district court granted iyO a preliminary injunction on April 23, 2026, finding iyO likely to succeed on the merits of its trademark claim [22][23]. By early 2026 court filings confirmed that OpenAI had abandoned the "io" name for the Ive-designed device, which it referred to internally by a codename rather than the io brand [17][22]. The underlying acquisition itself was not undone by the dispute; the fight concerned the name and marketing rather than the ownership of the company [8].
The purchase extended OpenAI from software and model APIs toward owning a piece of consumer hardware, a path that several large AI and platform companies have been weighing as voice and multimodal models mature. For OpenAI the appeal of a dedicated device is a direct channel to users that does not depend on Apple's or Google's phone platforms, where OpenAI distributes ChatGPT but does not control the operating system [5][6]. A device built around its models could put ChatGPT-style assistance at the center of a product rather than inside an app on someone else's phone.
The deal also brought design talent that OpenAI did not have in-house. Building physical products is a different discipline from training models, and acquiring io gave OpenAI an experienced hardware and design team in one step, led by a designer whose past work shaped the category the new device hopes to sit beside [9][5]. The all-equity structure let OpenAI make a large acquisition without spending cash, using its own richly valued stock as the currency [2][9].
Reaction split between excitement about the pedigree of the people involved and doubt about whether the product could succeed. Supporters pointed to Ive's record and to OpenAI's lead in AI models, and some bullish commentary argued the hardware effort could add substantial long-term value to OpenAI [24][5].
Skeptics raised several concerns. Writing for Six Colors, Jason Snell argued the announcement was long on vision and short on specifics, with no product shown and a video that dwelt on the relationship between the two founders rather than any technology [25]. A recurring worry was the track record of AI gadgets. The Humane AI Pin and the Rabbit R1 had both launched to weak reception, with Humane selling few units before its assets were sold to HP and Rabbit facing returns and criticism, and observers asked why a separate AI device needed to exist at all when a phone already runs the same assistants [13][26]. Others questioned the makeup of the io team, noting it was heavy on designers relative to hardware engineers, and warned that hardware is slow and capital-intensive, so battery life, heat, privacy, and the ambitious ship dates all carried risk [24][14]. The promotional video itself became a talking point after reporting that its production cost at least $3 million, money spent on a film that the company then had to pull from the web [27][8].
The acquisition of io is notable as the moment OpenAI committed real money and a marquee design team to building its own hardware, rather than relying only on partners' devices to carry its models. Whether the bet pays off depends on a product that, as of mid-2026, had not yet shipped and had lost the name it launched under. The deal showed how far an AI company would go to reach users directly, and the trademark fight showed how quickly an ambitious hardware push can run into the ordinary frictions of branding and litigation [8][22]. The first device, and whether it can avoid the fate of earlier AI gadgets, remains the open question that the deal set in motion [14][13].