OpenAI's Acquisition Of Jony Ive's Startup Poses Threat To Apple's Dominance

Bibhu Pattnaik

May 25, 2025

The tech industry could witness a shift in power as OpenAI, under the leadership of CEO Sam Altman, acquires Jony Ive’s startup, io, for a staggering $6.5 billion. Ive, a key player in Apple Inc.’s (NASDAQ:AAPL) design history, will now be directing design at OpenAI.

Bloomberg's Mark Gurman, in his latest weekly "Power On" shared that Apple’s stronghold in the tech industry is being challenged.

The tech giant, which has been grappling to make significant progress in artificial intelligence, is seeing an exodus of talent, including high-ranking executives and engineers. This comes at a time when competitors like Google and Microsoft Corp. (NASDAQ:MSFT) are making strides in generative AI.

Jony Ive, Apple’s former designer who played a pivotal role in the design of the iPhone and other iconic products, has now joined the ranks of a competitor. OpenAI has acquired Ive’s io startup for a whopping $6.5 billion. Ive will now be in charge of design at OpenAI, which includes the development of new hardware devices.

While Apple’s annual Worldwide Developers Conference on June 9 will showcase redesigned versions of Apple’s operating systems, no major AI breakthroughs are anticipated. The OpenAI deal is a wake-up call for Apple, which seems to be stuck in a legacy world.

Also Read: Apple’s 2027 Vision: Foldable iPhones, Smart Glasses, And AI Innovations

Despite these hurdles, Apple’s iOS ecosystem continues to be the most cohesive in the tech world. However, the tech landscape is evolving, and AI is fast becoming as fundamental as the multitouch display was two decades ago. Apple’s past triumphs don’t assure its future, and the company is evidently struggling to adapt.

Apple is developing smart glasses for next year, but this device will be an add-on to the iPhone, not a substitute.

The pressure is mounting for Apple to pioneer the next computing era, which entails revitalizing the Apple Intelligence platform, launching innovative new hardware, and creating the next iPhone before its competitors.

The acquisition of Ive’s startup by OpenAI signals a significant shift in the tech industry. With Apple’s key talent moving to competitors and the company’s struggle to make substantial progress in AI, its dominance is under threat.

The tech landscape is evolving rapidly, and companies that fail to adapt risk being left behind. This development underscores the importance of AI in shaping the future of the tech industry.

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