AI: OpenAI may acquire Io Products, a Jony Ive AI production. RTZ #683
Last week I discussed how OpenAI founder/CEO hinted at an AI hardware product, and posited that it may be connected to his long-time dalliance with Apple uber-designer Jony Ive on a secretive AI device project:
“Responding to an X engineer who said that computers should be cute, Altman wrote, “We are gonna make a rly cute one,” without offering further details.”
Now comes a report that OpenAI may be discussing a possible of said company, now revealed as Io Products.
The Information lays it out in “OpenAI Has Discussed Buying Jony Ive and Sam Altman’s AI Device Startup”:
“OpenAI in recent weeks discussed acquiring a startup its CEO Sam Altman has been working on with ex-Apple designer Jony Ive’s studio to develop an artificial intelligence-powered personal device, according to two people with direct knowledge of the deal talks.”
“They are also discussing partnership options beyond a full acquisition, one of the people said.”
The inspiration of course comes from science fiction, as it often does in silicon valley, all the way to the top:
“Ive and Altman began discussions more than a year ago on a device that could bring to life Altman’s dreams of creating voice-enabled AI assistants reminiscent of those in sci-fi films such as “Her.””
Yes, “Her” of Scarlett Johansson fame, and her unwanted dalliance with AI and their Voices.
The Information continues on Io Products:
“OpenAI executives at one point considered an acquisition price of at least $500 million, one of the people said. An acquisition would include a team of engineers that have worked on the device, one of these people said.”
“Designs for the AI device are still early and haven’t been finalized, the people said. Potential designs include a “phone” without a screen and AI-enabled household devices, they said. Others close to the project are adamant that it is “not a phone.”
The company has been working on its unrevealed product for some time now:
“The AI hardware venture—known as io Products—has raised an undisclosed amount of funding from Laurene Powell Jobs’s Emerson Collective and other firms. Altman has been working closely on the product, but is not a co-founder, one of the people close to the talks said. Whether he has an economic stake in the hardware project is unclear.”
An acquisition would give OpenAI direct access to mainstream consumers via hardware, a position dominated by Apple, Google, Amazon, Meta in various shapes and sizes. Now, many ‘Science Projects’, being imbued with AI with the utmost haste and investments.
It would be a new AI on ramp for OpenAI:
“The device project would add to OpenAI’s fast-growing portfolio of products in development as it tries to get its AI into the hands of millions of consumers. Those products include AI that uses web browsers, and teams designing AI server chips and humanoid robots. OpenAI explored numerous options for the server chips, which aim to reduce its reliance on Nvidia, but eventually decided to pursue the effort in-house.”
“Io Products employed engineers to build the device while OpenAI provided it with AI and Ive’s studio LoveFrom provided design help, the person said.”
“It wasn’t immediately clear whether Tang Tan and Evans Hankey, who previously worked with Ive on the iPhone and recently worked on the AI device startup, would join OpenAI as part of the deal.”
And it would be a new arena for OpenAI on the hardware front:
“Building a personalized AI device could put OpenAI in more direct competition with Apple, with which it has an existing partnership. Last June, OpenAI and Apple said the iPhone maker’s Siri assistant would tap ChatGPT to handle some queries and use OpenAI’s models to help customers with writing and image generation tasks.”
“Though the partnership generated splashy headlines, it’s not clear if the deal has helped it acquire new ChatGPT customers, and Apple didn’t pay OpenAI to use its models.”
And as I’ve discussed before, a crowded field for AI hardware to come, from glasses to headphones to watches and beyond:
And AI Voice is the most contested of all:
“AI voice assistants are becoming a heated battleground. OpenAI as well as rivals Meta Platforms, Google, Anthropic and xAI have released or are developing AI voice capabilities for their text chatbots. Last year, OpenAI launched a voice mode to ChatGPT, allowing customers to speak with the chatbot.”
“Around the same time, Meta began exploring AI-powered earphones with cameras, which the company hoped could be used to identify objects and translate foreign languages. It’s also working on a voice assistant people can use while wearing Meta’s Rayban smart glasses.”
And Hardware has its own challenges in the months to come, with the current administration’s volatile and unexpectedly high Tariff programs. I’ve highlighted the challenges for this AI Tech Week already. And hardware companies, from Apple to Nintendo are already rapidly reeling and reacting to their product and pricing strategies going forward.
Especially given the cemented position China and other countries in Asia enjoy in terms of the vast, deep supply chains that would take years and tens of billions to reproduce here in the US.
In the meantime, we may have $3500 iPhones. as Wall Street is pointing out.
Maybe it all settles somewhere in the middle by the time OpenAI and Io Products are ready to release their AI device for mainstream use. Stay tuned.
(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)
