OpenAI and Jony Ive hit snags on $500B AI device

OpenAI and renowned designer Jony Ive are wrestling with several technical setbacks with their NEW reserved AI device as they work tirelessly to establish a blockbuster tech product in 2026

The San Francisco startup led by Sam Altman acquired Ive’s company LoveFrom (io) last May for $6.5 billion, but it shared little about the two companies’ joint project. Now, sources familiar with the effort say the two are working on a palm-sized, screenless device that listens, watches, and responds to its environment, but key hurdles have yet to be resolved.

OpenAI and Ive battle software glitches and compute shortages

Ive and his team, famous for iconic Apple products such as the iMac, iPod, and iPhone, have built early hardware prototypes. However, progress is being slowed by software hurdles and the infrastructure required to support OpenAI’s powerful models. Issues under debate include shaping the assistant’s “personality,” addressing privacy concerns, and covering the steep computing costs of scaling the device to mass markets.

“Compute is another huge factor for the delay,” said one person close to Ive. “Amazon has the compute for an Alexa, so does Google [for its Home device], but OpenAI is struggling to get enough compute for ChatGPT, let alone an AI device — they need to fix that first.”

A person close to OpenAI described the current glitches as typical growing pains in product development. According to multiple people familiar with the project, OpenAI and Jony Ive are working on a device about the size of a smartphone, equipped with a camera, microphone, and speaker. One source said the gadget could even feature multiple cameras.

The device is designed to sit on a desk or table, but can also be carried around. Unlike voice assistants that activate with a trigger word, it would be “always on,” with sensors continuously collecting data to build a virtual assistant’s “memory.” The Wall Street Journal previously reported some of its early specifications.

OpenAI, now the world’s most valuable private company at $500 billion after surpassing Elon Musk’s SpaceX, sees hardware as a way to justify its soaring valuation. The goal is to go beyond the limited use cases of smart speakers like Amazon’s Echo, instead offering a far more capable AI companion.

Still, challenges remain. Two people familiar with the effort said the team has yet to settle on the device’s “voice” and personality. Another hurdle is striking the right balance in conversations: ensuring the assistant chimes in when helpful without dominating interactions — a weakness still evident in ChatGPT today.

“The concept is that you should have a friend who’s a computer who isn’t your weird AI girlfriend . . . like [Apple’s digital voice assistant] Siri but better,” said one person who was briefed on the plans. OpenAI was looking for “ways for it to be accessible but not intrusive”. 

Another person close to the project said that a model personality is tough to balance, noting that it can’t be too sycophantic, nor too direct; it should be helpful, but doesn’t keep talking in a feedback loop.

$500B startup races to prove hardware can match soaring valuation

OpenAI’s device faces a tough market. Friend, an AI pendant worn around the neck, has been slammed as “creepy” with a “snarky” personality, while Humane’s AI pin — backed by Sam Altman — has already been scrapped.

Despite the risks, OpenAI has been aggressively expanding its hardware push. The $6.5 billion acquisition of Ive’s firm io brought in more than 20 ex-Apple engineers, many handpicked by Ive, and LinkedIn records show at least a dozen more Apple hardware veterans joined this year. The company has also lured talent from Meta’s teams working on the Quest headset and smart glasses.

To bring the project to life, OpenAI is collaborating with Chinese contract manufacturers such as Luxshare, though sources told The Information the device could ultimately be assembled outside China. Both OpenAI and LoveFrom declined to comment.

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