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Iconic British designer Sir Jony Ive, the man behind Apple’s most celebrated products, is joining forces with OpenAI in a bold bid to reshape the future of AI hardware. The ChatGPT maker has acquired ‘io’, a design-focused startup founded by Ive, in what is reportedly its largest acquisition yet, valued at a staggering $6.5bn (£4.7bn). OpenAI already had a 23% stake in the startup prior to yesterday’s announcement.
The deal will see OpenAI integrating ‘io’ into its operations, with Ive taking on broad creative and design responsibilities. Ive left Apple in 2019 to found his own creative company LoveFrom (which remains separate), and although he won't be joining OpenAI as an employee, his company will steer design across the firm’s products, including software. Ive’s return to hardware design comes after years of quiet collaboration with OpenAI and a decade-defining tenure at Apple, where he helped launch the iMac, iPhone, and Apple Watch.
OpenAI CEO Sam Altman has revealed his ambitions to create a “family of devices” purpose-built for AI, describing the opportunity as a chance to “completely re-imagine what it means to use a computer.” The first device, according to media reports, won’t be wearable but a screenless, compact AI companion, small enough for a pocket, yet powerful enough to become a third pillar alongside a laptop and smartphone.
But can Ive really create the next ‘Apple’? So many firms have tried to develop AI-infused hardware in the past few years, but nearly all have failed to gain any significant traction. For example, both Google and Meta have attempted to push AI smart glasses, we also have the $700 Humane AI pin, which it claims is the beginning of a post-smartphone future, but really is just a flop. We can add in the pocket-sized assistant Rabbit R1 device into that bucket as well, another AI-powered wearable launched with bold claims but no future. Apple of course has been investing in its Vision Pro headset (See here), but unsurprisingly at £3,500 few are jumping off the shelves.
We also have to address the absurd amount of money ‘io’ is being valued at, especially for a firm with little to show for it other than Ive's reputation. Just to put that valuation in perspective, here are some companies at a similar valuation, all with much more substance; RPA supplier UiPath ($6.55bn), global investment firm Invesco ($6.55bn), Cybersecurity firm SentinelOne ($6.4bn), e-commerce site Etsy ($4.85bn), retailer JD Sports (£4.88bn) and UK hospitality firm Whitbread (£4.9bn).
Are these organisations going to be the next Apple, of course not, but they are significant business, some which have run successfully for decades. You really have to ask the question, given all the failures we have seen from AI-hardware so far, is this really a smart move? OpenAI has firmly established itself as one of the leading LLM suppliers, but it is moving away from its close relationship with Microsoft (See here), and toying with changing its profit structure (See here). Amidst a market that few can predict more than a year or so ahead, is betting such a big sum of its recent funding on a risky endeavour goign to pay off? I guess we will all have to wait and see (I wouldn’t hold your breath though, I have a feeling it might be a while).
Posted by: Simon Baxter at 09:56