OpenAI is set to acquire io, an AI device startup founded by Jony Ive, for approximately $6.5 billion, marking a significant collaboration between OpenAI's Sam Altman and Apple's former design chief.

The anticipated device is expected to be screen-free, distinguishing it from traditional smartphones, and aims to integrate AI capabilities into users' daily lives.

The first product from this collaboration is expected to launch in 2026, rumored to be a next-gen AI-powered assistant that adapts to users' surroundings.

Ive, renowned for designing the original iPhone, is involved in this project, which is speculated to enhance personal and professional relationships through timely reminders and support.

Despite the innovative potential, there are concerns about whether users will adopt another device that functions primarily as an assistant, given that smartphones already integrate advanced AI capabilities.

Privacy concerns are prominent with this new device, although OpenAI claims it will prioritize user privacy without disclosing specific measures.

The partnership aims to develop a tangible hardware product that will prominently feature AI technology, although specific functionalities remain undisclosed.

The device's success will depend on addressing core usability challenges rather than simply adding features, which has been a pitfall for previous AI products.

Mass production of the device is expected to begin in 2027, with assembly planned outside of China to minimize geopolitical risks.

As the AI hardware race intensifies, Apple's stock has faced pressure amid concerns about competition and market conditions, particularly following the acquisition announcement.

Investors reacted negatively to the news, causing a drop in Apple's stock, highlighting concerns over its ability to keep pace with AI advancements.

Altman clarified that the device will not replace the iPhone but will complement existing smartphones and laptops, positioning itself as a third essential tech product.