OpenAI dropped a bombshell this week when it announced its purchase of the hardware startup of former Apple (NASDAQ:AAPL | AAPL Price Prediction) Chief Design Officer Jony Ive. Undoubtedly, Ive is one of the most renowned names in the world of high-tech design. And with Ive to team up with Sam Altman and ChatGPT-maker OpenAI, it certainly seems like two of the most disruptive minds in tech are working on a game-changing AI hardware product that may very well mark the next big tech product to succeed the iPhone.
For now, little is known about what’s going on underneath the hood. But if Altman and company are willing to pay a whopping $6.4 billion for Ive’s firm, one has to think that something big, perhaps even revolutionary, could be in the works. In any case, Apple and CEO Tim Cook would be wise to treat the competitive threat of the Ive-Altman team seriously.
So, what’s the OpenAI-Ive collab going to result in?
That’s the billion-dollar question. And while we can only speculate as to the form factor of the secret, new AI device being worked on by io (the name of Ive’s AI startup), I do think that the AI hardware race stands to turn into a bit of a war as hardware makers duke it out for AI device supremecy. With Apple stock in a bit of a slump, selling off in the face of the big news, investors have yet another thing to worry about.
As Apple grapples with antitrust unknowns, tariff headwinds (Trump threatened to slap a 25% tariff on Apple to convince the firm to make iPhones in the U.S.), and being “behind” in the AI race, even long-time “buy it, don’t trade it” Apple bull Jim Cramer seems to be having his fair share of doubts over buying the recent slide in the stock.
Perhaps Cramer is right not to be an aggressive buyer on the dip, especially since it’s becoming really hard to evaluate what’s to come of the lingering tariff talks. In any case, I continue to stand by Apple as a great long-term investment, especially as it looks to take its time to reflect upon the potential emerging threat of OpenAI in the AI device scene.
Could OpenAI and io have their own iPhone moment?
According to Bloomberg’s Mark Gurman, who shared the OpenAI-io acquisition with the world, Ive’s new design could be “a game-changer for AI hardware UX.” According to Apple analyst Ming-Chi Kuo, the new device is rumored to be screenless and more like an iPod Shuffle. That’d entail no screen and a compact form factor, perhaps like the slew of AI devices (think the Humane AI pin) launched by various startups last year.
Indeed, it’s an exciting time for AI hardware, but is this device, poised to launch next year, really a threat to the Apple iPhone’s dominance?
Personally, I don’t think an AI device will be a direct rival to smartphones. There’s a time and a place for screens. However, an AI device (wearable or otherwise) does represent a new product category. And one that Apple will be sure to put up a fight to compete in.
For now, I wouldn’t write off Apple as it encounters a new competitor in the hardware scene. Apple may have gotten off to a sluggish start in the AI race. But DeepSeek has shown us all that it is possible to climb up the AI leaderboards from out of left field. If DeepSeek can compete with limited resources, I think it’s a mistake to dismiss Apple as an AI laggard just because of the current state of Siri. Changes are coming, and they could be massive.
Apple AI Glasses coming sooner rather than later?
With the Cupertino-based giant rumored to be ready for the launch of some smart glasses in late 2026, at least according to Gurman and others, it seems like Apple is ready to reinvent glasses sooner rather than later. Personally, I think Siri-enabled glasses could be the AI device that allows Apple to hit back at the coming “screen-free” OpenAI-io device that’s just around the corner.
Of course, the new AI glasses are rumored not to be the augmented reality (AR) ones that Apple fans have been eagerly awaiting. Given technical complications, it could take a few more years (perhaps 2027 or 2028) before we get those true AR glasses. In the meantime, though, I think a non-AR pair of AI glasses just makes sense. It’s hard to imagine a better form factor than a pair of glasses. By the time everyone gets used to wearing glasses in the interim, the masses will be ready to transition to the AR age.
In short, I wouldn’t bet against Apple as it strives to stay ahead of rivals, new and old. If anything, the stock seems way too cheap at less than $200 per share.
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