Here’s what’s on our plate today:

• 🧠 OpenAI’s quiet but bold hardware ambitions.

• 🛠️ Explore why interface-first thinking could define AI-native devices

• 📺 OpenAI-Nvidia deal, Gemini TV launch, and Amazon’s FTC trial.

• 📊 The Wednesday Poll asks if you’d buy a hardware product made by OpenAI.

Let’s dive in. No floaties needed…

The Laboratory

Inside OpenAI’s push into devices

At the surface, there might not be a lot in common between Ford, Apple, and Amazon. The first is famous for making automobiles accessible to the masses; the second reshaped the personal computing market, and the third did the same for online marketplaces. However, scratch the surface and a pattern, a business model, begins to emerge. This business model rests on the foundation of vertical integration.

Under the model, a company controls multiple stages of its supply chain, for example, instead of just making cars, a company also makes its own steel, batteries, and sells through its own dealerships. This can happen upstream (controlling raw materials or production inputs) or downstream (controlling distribution, retail, or customer access) or both.

Industry-defining companies like Ford, Apple, and Amazon have successfully leveraged this idea. And now it seems that OpenAI, the company most closely associated with artificial intelligence, is working to join their ranks.

OpenAI’s hardware ambitions

According to The Information, OpenAI recently signed a deal with Luxshare, the company that assembles Apple’s iPhones. The report further noted that OpenAI had earlier approached Goertek, a China-based company responsible for assembling Apple’s AirPods, HomePods, and Apple Watches.

This is not the only report that indicates that OpenAI is looking to develop AI devices.

In July 2025, the io Products Inc. team officially merged with OpenAI. io was a hardware startup co-founded by former Apple design chief Jony Ive. It was created to develop ‘physical AI embodiments’. Devices that integrate generative AI into the physical world. The deal between io and OpenAI was finalized at $6.5 billion, making it one of the largest acquisitions to date, and it signifies a strategic move into AI hardware development.

Earlier, OpenAI had invested in io, acquiring a 23% stake in late 2024. Altman and Ive are reported to have collaborated on the vision for AI-native hardware, culminating in the acquisition. In a joint announcement, Altman and Ive expressed excitement about merging io’s design-focused approach with OpenAI’s AI capabilities to create innovative devices.

While just these two pieces of information would be enough to convince many that OpenAI has plans to enter the consumer device market, there is more evidence that cements the idea.

A June 2025 9to5mac report said court filings from a trademark lawsuit brought by Google-backed startup iyO over OpenAI’s dropped “io” brand revealed what Sam Altman and Jony Ive’s hardware team was developing. According to the documents, OpenAI studied in-ear and audio devices extensively but confirmed that its first AI hardware product will not be an in-ear or wearable device.

The product, described by Altman as something that “fits in your pocket or sits on your desk,” is still in development and at least a year away from launch. The documents further reveal that Altman emphasized that the collaboration between OpenAI and io aims to create products that go beyond traditional devices and interfaces.

So, while OpenAI is maintaining partnerships like its ChatGPT integration with Apple platforms, it is also focusing on entering a market that is dominated by big tech giants like Apple, Google, and Samsung. And it is doing this despite having no prior experience in this area. So, why the risk?

The strategy of AI devices

OpenAI is widely known as the company behind the chatbot ChatGPT. Beyond the chatbot, the company is responsible for developing the Large Language Models (LLMs) that make AI tech possible. This technology, though powerful, has to be packaged into chatbots, images, and video generators for it to have real commercial value. For now, OpenAI relies on partners like Apple, Microsoft, and other device makers to deliver its models to end users.

Owning the container (hardware) reduces reliance on third-party platforms that can throttle access or take a cut. It’s the same playbook that pushed Amazon into Kindle and Apple into silicon. For OpenAI, a device can become a persistent, multimodal sensor/assistant that feeds and showcases its models in ways phones don’t. Court filings and OpenAI’s own statements frame this as escaping “traditional products and interfaces”.

Another important motivation would be to improve user experience and introduce new features. Right now, AI in apps is throttled by smartphone UX (lock screens, app hopping, permissions). A purpose-built form factor that is ambient, hands-free, and context-aware would let OpenAI design the interface and input stack around the model, not the other way around.

Reports, like the one from Reuters, highlight that OpenAI is aiming to create an AI-native device designed from the ground up to work with AI models, rather than bolted onto existing platforms.

Major tech news platforms have even put out their speculations as to what these devices could look and feel like.

From concepts to device: What’s next?

According to a report from 9to5mac, although OpenAI and io claim their first product is not a wearable, court documents reveal their team studied iyO’s 3D ear-scanning technology to understand custom earpiece ergonomics.

Former Apple engineers on io, including Marwan Rammah, explored buying an ear-scan database to inform design. iyO pitched partnerships or acquisitions for up to $200 million, but io’s team, led by Tan, declined. According to the report, Evans Hankey clarified that io didn’t plan to make custom-molded earpieces, suggesting their focus is on other types of AI hardware.

This hints that OpenAI and Jony Ive’s team are likely exploring AI-enabled consumer devices that prioritize ergonomics and user experience rather than traditional wearables.

Can OpenAI avoid hardware pitfalls?

OpenAI is neither the first nor will it be the last to try to deliver an AI-first device capable of competing with smartphones and wearables. Since 2022, devices like the Humane AI Pin and Rabbit R1 have tried to pitch themself as the replacement for smartphones. However, both devices met an untimely death due to their lack of appeal to the user.

The Humane AI Pin was deemed “the worst product ever reviewed” by prominent YouTubers, while the Rabbit R1 was described as unfinished and unhelpful at launch and was later marred by security issues. These can be sidelined as early experiments that failed. However, even established brands like Amazon and Google struggle when it comes to packaging AI products in devices.

Forms taken by AI in devices include Voice assistants such as Echo/Alexa, both of which have massive unit sales. However, they still sustain billions in losses due to the high cost of running the devices and not enough avenues for revenue.

Beyond the smart speaker, companies like Meta have opted for wearable devices. The Ray-Ban Meta smart glasses mark one of the rare successes in the wearable technology market that packages AI tech. Since their debut in October 2023, these AI-powered glasses have sold over 2 million units, and EssilorLuxottica, which produces them, has now publicly revealed that it’s aiming to produce 10 million Meta glasses each year by the end of 2026.

However, none of these form factors has been able to dent the market for smartphones, which remain the primary source of delivering AI technology to the end user. As such, it will be interesting to see if OpenAI will be able to succeed where others have struggled.

Why AI hardware is so hard

Despite bringing in a top-tier hardware design team, OpenAI has its work cut out. Smartphones are not an easy device to replace, and while AI features are welcomed by users, the lack of AI is not enough to switch users over to other brands, or leave form factors. The successful sale of Apple’s iPhone 16 series is a testament to this phenomenon.

For OpenAI, the task becomes even more difficult since it will have to navigate its complex relationships with the competition, Google, and Apple, who are also collaborators.

Apple is a key distribution partner for OpenAI; its ChatGPT app is available on the Apple App Store, and OpenAI has worked with Apple to ensure its apps run smoothly on iOS devices. Similarly, OpenAI is looking to use Google’s cloud service to meet its demand for computing capacity despite competing in areas like LLMs.

If OpenAI can create hardware that can be a viable alternative to smartphones and smartglasses, it will pit it directly against both Apple and Google, both of which have their own line of wearables as well. For OpenAI, this might not be enough to stop its plans since creating a vertically integrated business will allow it to have a lasting impact on the industry.

OpenAI, as of now, seems to have a clear goal. To dominate the AI space, be it in chatbots, API, or hardware. And it plans to do this through acquisitions, investments, collaborations, and government partnerships.

Brain Snacks (for Builders)

Quick Bits, No Fluff

• OpenAI deepens Nvidia ties: OpenAI announces a multi-year partnership with Nvidia to boost infrastructure capacity—hinting at more model releases and faster rollout.

• Gemini invades Google TV: Gemini AI is coming to Android TV and Google TV, offering voice control, content suggestions, and smart home integrations.

• Amazon faces FTC in court: Amazon’s landmark antitrust trial kicks off, with the FTC arguing the tech giant harms competition and inflates consumer prices.

Wednesday Poll

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