The news: OpenAI is acquiring former Apple device chief Jony Ive’s device startup, io, for $6.4 billion. As part of the acqui-hire, Ive will take over design and creative control at OpenAI, with outside assistance from Ive’s LoveFrom design firm.

The takeover is expected to close this summer upon regulatory approval.

OpenAI CEO Sam Altman said he’s currently testing a prototype created by Ive, which may be the dedicated AI device teased last fall. The product, which could be announced as early as 2026, is likely to be screen-free, as Altman has lamented about how screens make laptop use cumbersome.

Potential to thrive: OpenAI has strong momentum right now and the involvement of Ive, who Altman called “the greatest designer in the world,” could help the company succeed where other AI device makers have failed.

Ive played a significant role in developing the iPhone, iPad, MacBook, and Apple Watch, so he could be a strong leader in a new consumer device category beyond phones, tablets, and laptops.

OpenAI’s assets: Software and timing could be critical advantages for an OpenAI device.

• Buggy responses from Humane’s Ai Pin contributed to its failure, while Rabbit’s r1 has been criticized for its “undercooked” operating system. In contrast, OpenAI’s robust ChatGPT product may offer a more solid backbone.
• OpenAI could have an edge by choosing manufacturing locations outside of regions with high tariffs, sidestepping issues faced by Apple and Nvidia.

Impending roadblocks: One challenge for a devoted AI device is the increasing availability of on-device AI features in smartphones, which could dampen consumer interest in a separate device.

• OpenAI’s device will need to differentiate on the size and price of smartphones and ideally be priced closer to the Ray-Ban Meta Smart Glasses ($299) than the now-defunct Ai Pin ($699).
• Too high of a price or too bulky of a form factor could doom the product. Ive called the Ai Pin and Rabbit’s r1 “poor products,” per Bloomberg.

A subscription fee may be necessary to cover computing costs, but considering only 6% of US smartphone users would pay for AI features, a separate device would likely fare the same, per CNET.

Our take: This marks OpenAI’s transition from software into hardware and consumer electronics, and Ive’s acqui-hire could be its most strategic move yet. With the ChatGPT maker’s vast capital, returns on Ive’s involvement could be substantial.