OpenAI Buys iPhone Designer Jony Ive’s AI Device Start-Up for $6.4 Billion

OpenAI has announced that it is buying Jony Ive’s artificial intelligence (AI) device start-up company for $6.4 billion in an all-equity deal.

Ive is best known as the original designer of Apple’s (AAPL) signature iPhone. An award-winning designer, Ive left the company in 2019 and has since founded his own company called LoveFrom, which he describes as a “creative collective.”

The AI device start-up company run by Jony Ive that OpenAI is purchasing is called “io.” In a written statement, OpenAI said that io will merge with it once the acquisition is complete, while Ive’s other company, LoveFrom, will remain an independent entity.

Biggest Deal

The acquisition of io is by far OpenAI’s largest acquisition to date and comes weeks after the privately held company agreed to buy AI-assisted coding tool Windsurf for $3 billion. Windsurf, formerly known as Codeium, competes with Cursor, another popular AI coding tool, as well as existing AI coding features from technology giants such as Microsoft (MSFT).

The move to acquire io comes as OpenAI, which was recently valued at $300 billion in a funding round, races to compete in the generative AI race against competitors such as Alphabet (GOOGL) and Elon Musk’s start-up xAI. The purchase of io is subject to regulatory approvals.

It is not clear what AI devices OpenAI will get through the purchase of Jony Ive’s io company. In a news release, OpenAI said Ive and a team of about 55 engineers, designers and researchers will assume creative and design responsibilities across OpenAI and build hardware that helps people better interact with artificial intelligence. AAPL stock has declined 19% this year.

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