OpenAI closes $6.5B all-stock acquisition of Jony Ive's hardware startup IO
Jul 9, 2025
Key Points
- OpenAI closes $6.5 billion all-stock acquisition of IO, Jony Ive's hardware startup, formally entering the consumer hardware market with 55 of IO's engineers.
- Ive operates under contract dedicating majority time to OpenAI while maintaining IO as separate entity and retaining clients including Airbnb and Ferrari.
- Deal faced no regulatory resistance, with OpenAI's prior 23% stake and private status limiting FTC antitrust scrutiny in a market dominated by iPhone duopoly.
Summary
OpenAI has closed its $6.5 billion all-stock acquisition of IO, the hardware startup co-founded by Apple's former design chief Jony Ive. Ive will work under a contract structure dedicating most of his time to OpenAI while keeping IO as a separate entity. IO retains clients including Airbnb and Ferrari, allowing Ive to continue his design consulting practice. Fifty-five hardware engineers from IO are joining OpenAI.
The deal faced no regulatory obstacles. OpenAI already owned 23% of IO from a 2024 investment, so the acquisition was buying the remainder. A naming dispute with another company called IO required OpenAI to remove IO branding, but this did not block the transaction. Being private likely helped here, as FTC antitrust scrutiny would be lighter than if OpenAI were public. Making the case that the deal harms competition is difficult when OpenAI is entering a market dominated by the iPhone duopoly with one of the world's best hardware teams.
The all-stock structure values the deal at roughly two percentage points of OpenAI's valuation to acquire Ive and his team.