OpenAI acquires iPhone designer Jony Ive's startup for $6.5 bln

OpenAI has struck a deal to acquire io Products, the hardware startup founded by former Apple design chief Jony Ive, in a transaction valued at $6.5 billion, as per a recent report by Reuters. Additionally, OpenAI will bring Ive on board to lead design and creative development of new devices tailored for the AI era, according to OpenAI's official website.  

The acquisition marks a significant expansion into hardware for OpenAI, best known for its popular AI chatbot ChatGPT. Ive's design firm LoveFrom, has been collaborating with OpenAI for two years on AI device concepts.

The deal, structured as an all-stock transaction based on OpenAI's $300 billion valuation, gives the AI company full control of io Products, in which it previously held a 23% stake, states the Reuters report.  

The report further states that OpenAI CEO Sam Altman and Ive hinted at an undisclosed prototype in development, describing it as groundbreaking technology that could redefine how users interact with AI. The partnership aims to combine OpenAI's AI capabilities with Ive's product design expertise, which helped design iconic Apple devices, including the iPhone, iPad, iPod, and the MacBook Air.  

The move comes as several AI hardware startups have struggled to gain traction, with products like the currently discontinued Humane's AI Pin facing criticism for technical limitations. Neither company disclosed specific timelines for bringing new devices to market.