OpenAI and io’s Early AI Hardware Ambitions Revealed by Court Filings

Recently released court documents have shed light on an intriguing collaboration between OpenAI and Jony Ive's new startup, io, as they work together on a next-generation artificial intelligence device intended for mass-market adoption. Legal filings associated with a recent trademark dispute detail the scope and ambition of their hardware efforts, moving beyond speculation and rumors toward concrete—though still early—prototype development.

The Trademark Dispute and Its Repercussions

The story emerges from a lawsuit filed by iyO, a Google-backed startup specializing in custom-fit earpieces, against OpenAI and io. At the heart of the matter are trademarks and the competitive push to create the next defining AI-enabled hardware. Amid the proceedings, OpenAI was compelled to take down promotional materials relating to its $6.5 billion acquisition of io, reflecting the seriousness of the dispute. OpenAI, however, firmly denies any trademark infringement and is actively contesting iyO's allegations.

DeepFounder Analysis

Why it matters

This development is significant because it represents tech giants and legendary designers aiming to shape the future of human-AI interaction through new kinds of dedicated devices. Just as the iPhone redefined mobile computing, these AI-first devices could usher in the next paradigm for startups and the broader ecosystem—blurring the boundary between software, AI models, and purpose-built hardware. For founders, this signals a major strategic shift: physical devices will increasingly serve as direct conduits for AI, expanding the field beyond apps and web platforms.

Risks & opportunities

For startups and founders, the primary risk is overspecialization in a fast-evolving hardware landscape—even well-funded prototypes may never reach market or could be leapfrogged by more flexible competitors. However, the opportunity is immense: with companies like OpenAI, Google, and Meta exploring diverse form factors, there is growing demand for new AI-integrated form factors—think AI glasses, wearables, desktop companions, or ambient interfaces. The race is open for nimble startups to build ecosystem tools, modular components, or novel use cases that ride this hardware wave. Historically, the rise of the iPhone gave birth not just to apps, but also to whole categories of accessories and new platform businesses—it could happen again here.

Startup idea or application

Inspired by this trend, a practical startup concept would be to develop an open platform for prototyping AI companion devices. Imagine a toolkit and cloud platform allowing makers to quickly combine AI models, sensors (camera, mic, biosensors), and ready-made ergonomic enclosures—helping founders test, iterate, and validate new hardware concepts without massive upfront R&D. Services could include rapid prototyping, market validation, and developer SDKs for the emerging AI hardware ecosystem.

What the Filings Reveal About AI Device Development

Court documents reveal that, for over a year, OpenAI leaders and former Apple executives at io have systematically studied in-ear wearable technology. They reportedly purchased a broad selection of headphones—at least 30 different sets—to analyze what competitors currently offer. Additionally, meetings took place with iyO's leadership to examine their in-ear product, including direct technology demos. Despite these explorations, documents clarify that OpenAI and io's first device together may not even be in-ear hardware or a typical wearable.

Prototyping Beyond the Ear: The AI Device Remains a Mystery

Tang Tan, io’s co-founder and former Apple hardware leader, testified that the prototype mentioned by OpenAI CEO Sam Altman is neither an in-ear nor a wearable device. The specific design is still undecided, and the hardware is at least a year away from any formal unveiling or sale. This keeps the tech world guessing: Will it be a desktop gadget, a pocket assistant, or something entirely new?

Sam Altman has alluded to a "family" of intelligent devices—each with unique capabilities and deeper awareness of a user's environment, positioning this platform as a potential "third device" alongside laptops and smartphones. The competitive landscape is heating up, with Meta and Google prioritizing smart glasses, while Apple is reportedly prototyping AI-enhanced AirPods.

AI Hardware Research: Competitive Intelligence and Due Diligence

Documents further detail OpenAI and io's meticulous approach, from direct product research to sensitive meetings with iyO’s CEO and technical teams. Initial attempts to collaborate or co-develop were ultimately declined by io's leadership, despite pitches for partnerships, investment, and even outright acquisition offers from iyO.
The filings also reveal io’s due diligence in technology acquisition—exploring the purchase of 3D ear scan data for ergonomic insights, yet remaining cautious about inadvertent IP exposure during discussions.

What’s Next for AI Devices?

The upshot: OpenAI and io are still at least a year away from any commercial product launch, but their market research and exploratory efforts demonstrate a serious, multifaceted investment in AI-first hardware.

AI hardware OpenAI Wearables Startup strategy Jony Ive

Visit Deep Founder to learn how to start your own startup, validate your idea, and build it from scratch.

📚 Read more articles in our Deep Founder blog.