OpenAI explores acquisition of Altman-backed AI hardware startup

OpenAI has entered discussions about potentially acquiring "io Products," an AI hardware startup where CEO Sam Altman collaborates with former Apple design chief Jony Ive.

Recent negotiations valued the deal at over $500 million, though the companies are also exploring partnership arrangements that fall short of a complete acquisition, The Information reports.

The startup aims to develop AI-powered personal devices that align with Altman's vision - creating a voice-enabled AI assistant similar to the one depicted in the science fiction film "Her."

The AI device designs remain in early development stages. Current concepts include a screenless "phone" and various AI-enabled household devices. While Altman plays a key role in product development, he isn't listed as a co-founder. The venture has secured funding from Laurene Powell Jobs' Emerson Collective and other investors, though the exact investment amounts remain undisclosed.

Meta leads the way in AI hardware success

This hardware initiative would expand OpenAI's growing product lineup, which already encompasses AI-powered web browsers, server chips, and humanoid robots. The project combines io Products' device expertise, OpenAI's AI technology, and design work from Ive's LoveFrom studio.

A dedicated AI device would intensify competition with Apple, despite their existing partnership. The AI assistant market continues to heat up, with Meta, Google, Anthropic, and xAI developing their own solutions alongside OpenAI.

While most AI assistants operate through web browsers or smartphones, Meta stands alone with a successful hardware product - the Ray-Ban Smart Glasses. These glasses appear to provide genuine value for some users, though it remains unclear whether users primarily engage with Meta AI or simply record videos through the device.