Sam Altman and Jony Ive formed a dream team to reinvent hardware. Now it’s at the center of a battle for OpenAI’s future

As Jony Ive and Sam Altman hugged and sipped espressos at a picturesque North Beach cafe in May 2025, a new war was brewing. The coffee date was featured in a viral video to announce that Altman’s OpenAI was acquiring io Products, a small hardware startup founded by Ive, the legendary designer of the Apple iPhone and perhaps the world’s most famous tech product designer. 

Their alliance signaled a brazen ambition to build the next great consumer product—this time for the AI age, and a bet that OpenAI, the maker of ChatGPT, could unseat the likes of Apple using the iPhone maker’s former design star.

Now, before any products have even been released, a scorched-earth lawsuit from Apple that accuses OpenAI of trade secret theft has thrown those plans into chaos, raising the stakes for the AI startup—and Ive—to deliver a flawless, high-profile hit device.

OpenAI’s device, expected to ship as early as next year, is still something of a mystery. A recent Bloomberg report citing anonymous sources described it as a home-speaker-like device that will serve as an active AI companion and feature moving mechanical parts designed to mimic human behavior. 

A source familiar with OpenAI’s plans told Fortune that the design of the initial hardware device has been finalized, while work on a broader family of AI devices proceeds. 

Success is hardly guaranteed. Building hardware as a company with zero track record is hard enough, and inventing an entirely new class of device for AI is a goal that has already humbled some startups and burned hundreds of millions of dollars in investors’ cash.

For OpenAI, the move into hardware is being driven by more than just a desire to sell a hot gadget. With the 11-year-old organization no longer the undisputed leader in large language models, hardware represents a strategic, maybe even critical, evolution of its business—a way to put its AI models in the hands of consumers and lock them in, giving them a reason to use OpenAI’s models even if they aren’t clearly better than rivals’ and ensuring that competitors can’t cut off the path to those users.

“They’re being forced to build hardware because it gives them more control over the user experience,” said Anshel Sag, a principal analyst at Moor Insights & Strategy who specializes in spatial computing. “The biggest challenge that OpenAI has is delivering on something that is compelling enough to get people to actually buy it.”

Ive, of course, built his legacy at Apple on an obsessive discipline: perfectly made products, developed in tandem with Apple founder Steve Jobs. The question now is whether Ive can pull off another feat of product design magic for a different fast-moving tech company. That would be challenging under the best of circumstances. Apple’s lawsuit threatens to derail the project. 

In the roughly one year since OpenAI acquired Ive’s io Products for $6.5 billion, the io team has been integrated into the parent company as the OpenAI hardware group. While OpenAI’s leadership and the majority of its staff........

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