OpenAI eyes Jony Ive's secret AI hardware startup

What does a phone look like when you completely strip away the screen? For over a year, tech watchers have wondered what Apple design legend Jony Ive and OpenAI boss Sam Altman were cooking up behind closed doors. Now, their secretive hardware experiment might be moving directly under OpenAI's corporate umbrella.

OpenAI is reportedly in talks to acquire io Products, the stealth hardware startup led by Ive and backed by Altman, in a deal that could value the company at over $500 million.

The iPhone dream team reunites

The duo began working together more than a year ago, with Altman closely involved in product development while the pair attempted to raise up to $1 billion in funding. The venture is not just Ive tinkering in a studio; he has assembled an astonishing roster of former Apple heavyweights.

Key figures include Tang Tan, who previously led iPhone hardware design, alongside Evans Hankey, who succeeded Ive as Apple design head. Under their working model, io Products builds the hardware, Ive's independent firm LoveFrom handles industrial design, and OpenAI supplies the underlying intelligence.

The startup is reportedly working on personal consumer devices and household products. Among the most talked-about concepts is a so-called "phone without a screen," aiming to replace physical taps and swipes with natural AI-first interaction.

A hedge against Apple and Google

OpenAI has made no secret of its interest in dedicated hardware. While ChatGPT dominates app stores, OpenAI remains at the mercy of Apple's iOS and Google's Android. Having proprietary hardware is the only reliable way to control the entire user experience from silicon to interface.

Previous attempts at standalone AI gadgets from smaller startups have flopped hard due to clumsy software, overheating issues, and frustrating latency. If anyone has the combined design chops and computational power to pull off an actual consumer hit, it is Ive and OpenAI.

Why it matters

We think this potential acquisition represents AI hardware's first serious attempt at a legitimate post-smartphone category. Existing AI wearables have felt like half-baked prototypes rushing to market without clear utility. Putting Ive's obsessive industrial design alongside OpenAI's cutting-edge models gives the category its best shot at creating an actual consumer breakthrough.

However, the move comes with noticeable governance baggage. Altman is directly backing the startup and intimately involved in building it. Using OpenAI capital to buy out a venture tied to its own CEO is bound to reignite scrutiny over internal governance and self-dealing, especially given OpenAI's turbulent boardroom history.

Strategically, the acquisition makes complete sense for OpenAI. If the company wants to avoid becoming just an API provider inside other tech giants' ecosystems, it desperately needs its own physical entry point. Whether users actually want a phone without a screen remains to be proven, but we believe this deal marks the moment AI hardware shifts from quirky tech demos to serious platform warfare.