$6.5 billion for startup with no products or revenue: OpenAI buys Jony Ive's AI gadget

OpenAI has just announced that it is collaborating with Jony Ive's design firm, LoveFrom, to create a new company called io, which will develop AI hardware. As Bloomberg reports, this is not just a joint venture, as OpenAI is reportedly paying $6.5 billion in shares to acquire io.

The startup has not yet launched any products on the market or generated any revenue, which makes this sum seem all the more incredulous. The takeover will give OpenAI a dedicated hardware team consisting of around 55 engineers and software developers, a collaboration with Jony Ive and his team, as well as a hardware product whose development is likely already well advanced, because as Jony Ive states in the video embedded below, OpenAI boss Sam Altman has already been able to take a prototype home and try it out.

However, following the spectacular failures of AI gadgets such the Humane Ai Pin in recent years, it remains to be seen whether OpenAI and LoveFrom will actually find a way to compete with smartphones and AI apps. The new product is intended to exist alongside smartphones rather than replacing them, and to enable users to interact with AI in a completely new way. io's first product is expected to launch in 2026. LoveFrom will also support OpenAI in redesigning ChatGPT's user interface.