JAKARTA - OpenAI announced that it has acquired hardware startup owned by Jony Ive,io Products, in a $6.5 billion deal. The California company will also appoint him as the creative chief to develop devices designed specifically for the era of generative artificial intelligence.
LoveFrom, the design firm founded by Ive after leaving Apple, has been working with OpenAI for two years to create a generative AI device an area that makes many startups difficult due to high computational demands, such as product failures such as Humane's AI Pin.
With Ive leading the design, OpenAI aims to combine the technology behind the popular ChatGPT chatbot with product design expertise that makes devices like iPhones a selling product.
Although financial details regardingio's acquisition were not disclosed, the stock-based deal was valued at $6.5 billion based on OpenAI's valuation of US$300 billion, according to sources close to the issue. OpenAI previously owned 23% of the shares in the company, according to sources requesting not to be named.
OpenAI, Sam Altman, and Ive CEOs stated in a video posted on the OpenAI blog, "The products we use to connect us with this incredible technology, yes, are decades old, so it's a natural thing to think that there's definitely something better than these old products."
Altman also revealed that they already had a prototype device, albeit without providing further details, but called it "the coolest set ever in the world."
Apple itself has not yet responded to this news. Apple shares fell more than 2% after the news broke.
The iPhone maker did seem slow in launching Apple Intelligence, a series of features that access ChatGPT, while some Android smartphones already have advanced AI tools.
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DA Davidson analyst Gil Luria argues, "OpenAI is interested in owning the next hardware platform so they don't have to sell their products through Apple's iOS or Google's Android." He also mentioned that this ambition is similar to that of Meta with Quest Goes and Meta Ray Bans.
Some companies like Humane AI and Rabbit are trying to build custom devices for the AI era, but Humane AI, founded by former Apple executives, is experiencing difficulties with AI Pin devices that have come under criticism for battery life, heat problems, limited functionality, and high prices.
HP buys AI's humane assets, including its AI Cosmos platform, intellectual property, and technical talent for $116 million, which essentially halts production of AI Pin products. On the other hand, Rabbit managed to sell more than 100,000 r1 devices, although reviewers said its functions were still limited when compared to smartphones.
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