When OpenAI released ChatGPT in late 2022, many described it as an “iPhone moment” for artificial intelligence technology.
On Wednesday, OpenAI took the analogy to the next logical step by hiring the creator of the Apple iPhone as part of a $6.5 billion acquisition that holds the potential to create an entirely new way for people to interact with AI technology.
OpenAI said it has acquired io, a startup founded by former Apple design chief Jony Ive. Ive and his team will now join OpenAI and lead creative and design work including on AI-powered computers, adding an intriguing new line of business for what has become an artificial intelligence powerhouse.
“The io team, focused on developing products that inspire, empower and enable, will now merge with OpenAI to work more intimately with the research, engineering and product teams in San Francisco,” OpenAI said in a blog post.
The deal marks the biggest acquisition ever for the privately held OpenAI, which investors recently valued at $300 billion. It comes just a weeks after OpenAI paid $3 billion for AI-assisted software coding tool Windsurfer.
Details about io’s product have not been revealed. What is increasingly clear, however, is that the interface to a universal personal AI assistant may not be on your phone, and definitely not your laptop. It could be some kind of wearable device. And Ive, given his huge role in making the iPhone, is well positioned to build one.
“The products that we’re using to deliver and connect us to unimaginable technology, they’re decades old. So it’s just common sense to at least think surely there’s something beyond these legacy products,” Ive said in a video that OpenAI posted about the acquisition.
Altman is betting that lightning will strike twice with his new hire. The market for a new AI device, like the smartphone before it, could be huge. While there will certainly be competing devices, as there were with smartphones, Altman’s expensive bet could pay off big. Since Apple introduced the iPhone in 2007, its revenue and market valuation have exploded, with Apple now worth more than $3 trillion.
In OpenAI’s video, Altman said he was impressed with the AI gadget that Ive’s company has built, but offered no details about it. “Jony recently gave me one of the prototypes of the device for the first time to take home and I’ve been able to live with it, and I think it is the coolest piece that the world will have ever seen,” he said.
Or course, the acquisition, which the Wall Street Journal said was expected to close in the summer pending regulatory approval, comes with major risks. Whatever the team ends up building with OpenAI, if anything, could flop. Meanwhile, OpenAI is burning through cash at a rapid rate as it tries to compete against Big Tech companies like Google-parent Alphabet and Facebook-parent Meta.
The Ives/OpenAI alliance is not the first to envision an entirely new form of hardware gadget for the AI age. Meta’s AI-enabled RayBan glasses have proven to be popular with consumers, to the point that Google announced its own partnership Tuesday with Warby Parker to produce smart glasses. Other efforts, like the much-hyped Humane badge—created by a pair of former Apple staffers—have turned out to be expensive flops bedeviled by technical glitches.
In a sign that investors think the new OpenAI alliance may be a winner, Apple’s shares quickly fell after the announcement about the acquisition, tumbling more than 2.5%.
