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OpenAI to Buy AI Device Startup from Jony in $6.5 Bn
AI Device startup co-founded by Apple veteran Jony Ive is going to be acquired in an almost $6.5 billion all-stock deal, forming a partnership with the iconic designer to expand into hardware.
Summary:
1. AI device startup co-founded by Apple veteran Jony Ive, is set to be acquired in an almost $6.5 billion all-stock deal.
2. The acquisition will give OpenAI approximately 55 hardware engineers, software developers, and manufacturing experts, and a team that will create a family of gadgets.
3. The acquisition will give OpenAI a dedicated unit for developing AI-powered products, and owning the secretive business, called io, will secure the services of Ive and other former Apple makers who worked on iconic gadgets like the iPhone.
The purchase, one of the biggest in OpenAI’s history, will give the business a dedicated unit for developing AI-powered products. Owning the secretive business, called io, will also secure the services of Ive and other former Apple designers who worked on iconic devices like the iPhone.
“I feel like everything I’ve learned over the past 30 years has brought me to this point and this moment,” the CEO of OpenAI said in a joint interview with Sam Altman on this latest startup news. This partnership and method of collaboration, in my opinion, will result in endless products.”
About AI Device Startup
For the British-born designer, the decision is a high-profile return to the consumer electronics industry he helped develop. Working for years alongside Steve Jobs, he created the appearance and feel of the modern smartphone, as well as the iPod, MacBook, iPad, and Apple Watch. He quit Apple in 2019.
When I left Apple, CEO Tim Cook proposed that we continue to collaborate. However, they never released a product jointly after Ive’s departure. And now, the designer is working on a new project with Altman, whom he sees as a “rare visionary.” Ive was once considered by Jobs as his “spiritual partner,” and his new job building competitor technology goods could be considered a bad portent for Apple, which is already struggling to compete in AI. In the interview, Altman said on this startup news that Jobs would be “damn proud” of Ive’s recent decision.
According to Altman, the AI tool will deliver a product of unprecedented excellence in consumer hardware. “AI is such a big leap forward in terms of what people can do that it needs a new kind of technology form factor to get the maximum potential out of it,” said the executive director. Apple shares fell as much as 2.3% in New York on Wednesday. They were down 17% to date as of Tuesday’s close.
According to the latest startup news, OpenAI will pay $5 billion in stock for io, as part of the acquisition. The remaining roughly $6.5 billion comes from a partnership formed in the fourth quarter of last year that saw OpenAI acquire a 23% share in io.
OpenAI’s startup fund also invested in Ive’s company at the time. Through her company, the Emerson Collective, billionaire philanthropist Laurene Powell Jobs also supports IO. Other investors include Sutter Hill Ventures, Thrive Capital, Maverick Ventures, and SV Angel. According to OpenAI, Altman does not have any equity in io.
The transaction is scheduled to be completed this summer, assuming regulatory approval. The acquisition of io will give the AI tool approximately 55 hardware engineers, software developers, and manufacturing experts- a team that will create what Ive and Altman believe in as a family of gadgets. The two executives had been working on some preliminary ideas for nearly two years, they said in this startup news.
