Can OpenAI Challenge Apple with an AI Device?

What we know, what we don't know and how OpenAI is betting on itself.

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Growth at OpenAI must be going well, they just went on a nearly $10 Billion acquisition spree for Windsurf and now Ive’s io company.

OpenAI is buying io, a hardware company founded by former Apple design chief Jony Ive for $6.5 Billion. This as Google’s Android XR glasses race to catch up with Meta’s AI glasses.

With Apple under pressure they too will be trying to marry Generative AI capabilities into their devices in new ways, perhaps even new form-factors. The battle for the AI wearables won’t even be in 2026, it will be in 2027. More than 15 years after Siri came, will we finally see smarter hardware?

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

Sam Altman

OpenAI is betting big on AI devices that accelerate ChatGPT’s adoption in the real world. About 55 hardware engineers ($5 Billion in stock + $1.4 Billion in cash), software developers, and manufacturing experts will join OpenAI as part of the acquisition including io co-founders Scott Cannon, Evans Hankey, and Tang Tan.

Jony Ive is a legendary Apple designer. But is Sam Altman a visionary? Sam Altman announced that OpenAI had acquired io in a bizarre dispatch that reads more like a “wedding website than a corporate press release .” (Futurism).

“Jony Ive wasn’t hired to design another iPhone.
He was hired to design what comes after the iPhone.

Not a device. A dimension.
Not another product. An AI OS paradigm made manifest.”

So OpenAI is working on a social media product, and an AI hardware wearable device (line of devices), among other things while being an LLM product interface company. It figures, Sam Altman is himself a bit of a Tycoon Octopus.

More than the future of Hardware, an AI Operating System

Altman suggested that the acquisition could increase OpenAI’s value by $1 trillion, and envisioned a “family of devices” being born from the partnership.

io is a firm about the future of AI hardware. When Ive wasn’t running his design firm LoveFrom, Jony Ive was building another new company, just around the corner in San Francisco’s Jackson Square, called io.

Is OpenAI’s Hardware Moonshot going to be Competitive?

Ive and Altman want to redefine how computers are used. Apple still hasn’t cracked AI, and it’s getting serious. The acquisition is $6.5 Billion, $5 billion in stock, OpenAI bought an initial 23% in Q4, for about $6.5 billion total.

OpenAI is betting on Apple 🍎?

OpenAI is poaching talent that used to work at Apple. Scott Cannon led teams on the Mac and iPad development. Evans Hankey was a senior member of the Apple design team who took over Ive’s own role after he left Apple. Tang Tan led design on the iPhone for years. It takes no keen analysis to observe how proven and talented this team is at shipping impactful products.

Not exactly a visionary move, but an interesting fork in the road for OpenAI that is trying to become profitable by 2029. OpenAI may end up going IPO before that.

OpenAI would be acquiring Jony Ive's AI hardware company io, with the intention to create a new line of AI-powered devices.

What sort of devices might those be?

• Headphones to GPT-5?

• More smart glasses?

• Something else? (more on this later)

The Very Bizarre Money Trail

According to Futurism, and OpenAI would prefer you didn’t know, Swedish tech entrepreneur Sebastian Siemiatkowski — the guy behind Klarna directed his family investment company to dump $5 billion into AI startups back in December, 2024, most of which went to io ($3.6 Billion).

Another major investor in io appears to be former Google designer Luke Wroblewski, who now spends his days as a director at Sutter Hill Ventures. These are peculiar people to be tied up with OpenAI, but Sebastian is known for his AI-first pranks at Klarna, boasting most recently that AI adoption shrank Klarna by 40%. Siemiatkowski has been an outspoken advocate of AI, having implemented the technology across Klarna’s customer service unit, at the price of quality service and Klarna’s brand reputation. The same guy who used an Avatar of himself to deliver Earnings recently.

The Siemiatkowskis’ little-known family office has been active since 2013. Flat Capital have made some huge bets in AI in recent years and the OpenAI ties really jump out at you. Suffice to say that investors in io pre OpenAI io acquisition feels very sketchy and like they did so based on insider-info.

With Love from Sam

In an interview with Bloomberg, Ive called AI hardware misfires like the Humane Pin and Rabbit R1 “very poor products,” and said that “there has been an absence of new ways of thinking expressed in products.” The history of technology is full of hardware failures, even worse when you add “AI” to the equation. Even Apple has been behind the times. Siri and Alexa feel genuinely irrelevant in 2025, once so full of promises.

Jony Ive has been best known for his service to Apple and helped shape its most iconic products for nearly three decades. I get it, but $6.5 billion? The Wall Street Journal reports that Altman and LoveFrom have been working together for two years and have considered options like headphones and devices with cameras.

The Promo Video circulated on X

OpenAI Plans to take on BigTech

OpenAI has growing momentum that could hurt Apple’s lack of momentum. In fact, as OpenAI scales it will likely diminish the market cap of Google, Apple, Meta and Microsoft. Ironic that Microsoft has a 49% stake in what amounts to an overwhelming competitor in AI.

We know that Apple will release its own smart glasses near the end of 2026, but will they be able to match the AI of Google’s Android XR glasses? OpenAI will be competing head to head with AI devices from Apple, Meta and Google, without any actual experience in hardware.

• In this post we’ll explore the form factor of the new AI device and many other related topics in detail and some depth.

• We’ll explore OpenAI’s trajectory as a growing consumer AI product company and its potential impact on the likes of Apple.

Who is OpenAI’s ChatGPT OS and devices likely to disrupt?

You can see the LinkedIn version of this poll here.

At a time when consumer behaviors are changing Google’s dominance and Apple’s position at the top of the tech industry for devices is under genuine threat, OpenAI is challenging them both. It’s also building a social network to challenge both xAI and Meta. GPT-5 is a unified interface into its future ChatGPT operating system, where a family of devices and a social network will operate too.

Can ChatGPT Lead to Ambient Computing?