Why OpenAI Is Buying Jony Ive’s IO For US$6.5 Billion

This article was originally published on Inc.com with the title "OpenAI Is Buying Former Apple Design Chief Jony Ive’s New Company for $6.5 Billion. Here’s Why."

OpenAI is shelling out $6.5 billion for Jony Ive’s one-year-old startup, which is called IO. The purpose of the deal is to try to create the best gadgets to house artificial general intelligence—or as OpenAI CEO Sam Altman said in a video released with a Wednesday announcement, to “let people use AI to create all sorts of wonderful things.” Although Ive and Altman haven’t shared details on the hardware, whatever form it ultimately takes likely won’t look like another smartphone.

“AI is an incredible technology, but great tools require work at the intersection of technology, design, and understanding people and the world,” Altman said in a statement. “No one can do this like Jony and his team; the amount of care they put into every aspect of the process is extraordinary.”

Ive is a British-born designer, credited for working on some of Apple’s most iconic products, including the Apple Watch, iMac, iPhone, and iPod, among others. Ive left Apple in 2019, but his creative collective LoveFrom began working with Altman and OpenAI two years ago. Last year, Ive founded IO, together with Scott Cannon, Evans Hankey, and Tang Tan, and began gathering a team of engineers, technologists, researchers, and product development and manufacturing experts in an effort to develop “products that inspire, empower and enable,” according to an announcement. Although LoveFrom will remain independent, the collective and Ive will oversee design and creative responsibilities at OpenAI, The Wall Street Journal reported. 

“I have a growing sense that everything I have learned over the last 30 years has led me to this moment,” Ive said in a statement. “While I am both anxious and excited about the responsibility of the substantial work ahead, I am so grateful for the opportunity to be part of such an important collaboration. The values and vision of Sam and the teams at OpenAI and IO are a rare inspiration.”

The acquisition represents OpenAI’s largest to-date and a substantial bet that the future of AI involves hardware. Altman told The New York Times that the partnership aimed to produce a hardware product “beyond the legacy products we’ve been using for so long.” Altman previously invested in a failed startup, called Humane, that was hoping to realize this post-smartphone vision with an AI-powered pin.

Although the full terms of the deal were not disclosed, OpenAI already owns a stake in IO, so the AI juggernaut will likely pay about $5 billion for IO, according to the Times. OpenAI anticipates bringing in $3.7 billion in sales in 2025 and $11.6 billion the following year. Asked how the company would afford the acquisition, Altman told the Times, “We’ll be fine.” He added: “Thanks for the concern.”