OpenAI is acquiring Jony Ive’s startup, LoveFrom io Products, in a $6.5 billion deal that will see the former chief designer of the early iPhones join as creative head, tasked with developing devices designed specifically for the generative AI era.
In the field of generative AI devices, where startups have faltered owing to high computational demands, including failures like Humane’s AI Pin, LoveFrom, the design studio Ive created after leaving Apple, has been collaborating with OpenAI for two years.
With Ive leading design, OpenAI aims to pair the technology behind its popular ChatGPT chatbot with the product design expertise that made devices such as the iPhone bestsellers. The companies did not disclose the financial details of the deal for io, which Ive co-founded a year ago. The all-stock deal was valued at $6.5 billion based on OpenAI’s $300 billion valuation, according to a source familiar with the matter.
OpenAI had previously owned a 23% stake in the company, according to the source who requested anonymity to discuss private matters.
“The products that we’re using to deliver and connect us to unimaginable technology. They’re decades old, yeah, and so it’s just common sense to at least think surely there’s something beyond these legacy products we have,” OpenAI CEO Sam Altman and Ive said in a video posted on OpenAI’s blog.
Altman said they had a prototype of a device without giving further details, but called it “the coolest piece of technology the world will have ever seen”.
Apple did not immediately respond to a request for comment. It’s shares fell more than 2% on the news.
The iPhone maker has been slow to roll out Apple Intelligence, a set of features with access to ChatGPT, with several advanced AI tools available on competing Android smartphones.
“OpenAI is interested in owning the next hardware platform so they don’t have to sell their products through Apple iOS or Google’s Android,” D.A. Davidson analyst Gil Luria said.
“This is the same ambition Meta has with the Quest goggles and Meta Ray Bans.”
A few companies such as Humane AI and Rabbit have tried to build bespoke devices for the AI era.
However, Humane AI, founded by a former Apple executives, struggled with its AI Pin device, which faced criticism for battery life, heat issues, limited functionality and high costs.
HP acquired Humane AI’s assets, including its AI platform Cosmos, intellectual property and technical talent for $116 million, effectively discontinuing the AI Pin product.
In contrast, Rabbit has sold over 100,000 R1 devices; nonetheless, reviewers have noted that the device’s capabilities is still limited in comparison to smartphones.
