OpenAI Reportedly Discussed Purchasing Altman/Ive AI Device Startup

OpenAI has reportedly considered acquiring a startup connected to its CEO.

Sam Altman had teamed with former Apple designer Jony Ive’s studio to develop an artificial intelligence (AI)-powered personal device. According to a report Sunday (April 6) by The Information, OpenAI has in recent weeks weighed a deal that could include a team of engineers at work on the device at the startup, known as io Products.

The report says that OpenAI at one point considered a purchase price of at least $500 million.

Among the designs for io Products’ AI device are a “phone” with no screen and AI-enabled household devices, the report adds. However, these designs are still in their infancy and have yet to be finalized.

The Information notes that this acquisition would add to OpenAI’s rapidly expanding product stable, which include AI software that can control users’ web browsers, AI server chips, and humanoid robots.

In addition, this could help OpenAI get its technology in front of more consumers while also placing it in stiffer competition with Apple, one of its key AI partners, the report adds. PYMNTS has contacted OpenAI for comment but has not yet gotten a reply.

News that Altman and Ive were at work on an AI device first surfaced in the autumn of 2023. As PYMNTS wrote at the time, the two appeared to be trying to recreate the success of the iPhone and App store with AI.

“Apple’s business model has always emphasized a tight integration between hardware and software,” that report said.

“This approach allowed Apple to control both the device and the operating system, ensuring a consistent and user-friendly experience, as well as facilitating the rise of subscription-based pricing models for apps and content, allowing users to pay on a recurring basis for access to premium services or content.”

In other OpenAI news, last week saw reports that billions of dollars in the company’s funding was contingent on its plan to restructure into a for-profit entity.

The startup is finalizing a $40 billion funding round that includes a condition that if it fails to complete that restructuring by the close of the year, the round could be scaled back by $20 billion, The Wall Street Journal reported.

Another report, this one from CNBC, said the provision would reduce the funding round by $10 billion, from $40 billion to $30 billion. The restructuring requires the approval of both its largest shareholder, Microsoft, and the California attorney general. OpenAI is also facing a lawsuit from Elon Musk — who helped launch the company — attempting to halt the restructuring.

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