OpenAI Finalizes $6.5 Billion Deal To Acquire Jony Ive's AI Hardware Startup—Here's What We Know About Their First Device

OpenAI has finally completed its $6.5 billion acquisition of Jony Ive's AI hardware startup io Products, officially bringing the former Apple Inc. AAPL design chief and his team into the fold to build a new generation of AI-native devices.

What Happened: On Wednesday, OpenAI updated, saying the deal has "officially closed."

While Ive's design firm, LoveFrom, will remain independent, it will take on "deep design and creative responsibilities" at OpenAI going forward.

According to the available reports, the first product will not be a wearable or in-ear device, but rather something that sits in your pocket or on your desk.

The rumored pocket-sized gadget will reportedly be context-aware, offering screen-free interactions by understanding the user's environment and behavior, reported MacRumors.

Why It's Important: Previously, it was reported that the io acquisition brings on board about 55 engineers and designers from Apple and LoveFrom, including Tang Tan, Evans Hankey and Scott Cannon — all key figures behind the creation of the iPhone, Apple Watch and other flagship devices.

The acquisition was first announced in May, with OpenAI CEO Sam Altman and Ive unveiling plans to develop new AI hardware that moves beyond legacy interfaces like smartphones and laptops.

After the acquisition was announced, Gene Munster, managing partner at Deepwater Asset Management, said that OpenAI represents the first significant competitive threat to Apple in two decades.

However, last month, OpenAI removed all public materials about its acquisition after IYO Inc. filed a trademark lawsuit claiming the "IO" name infringes on its intellectual property.

Read Next: