OpenAI and Jony Ive’s io are making waves with new developments in AI hardware, according to recent legal filings that shed light on their innovative efforts to create a mass-market device. These disclosures come amidst a trademark dispute lawsuit initiated by iyO, a Google-backed hardware startup specializing in custom-molded earpieces that connect to various devices.
In response to the lawsuit, OpenAI has removed promotional materials related to its $6.5 billion acquisition of io, aiming to comply with court orders. The company firmly denies any trademark infringement claims brought by iyO and is actively fighting to protect its intellectual property.
Over the past year, both OpenAI executives and former Apple leaders now working at io have been diligently researching in-ear hardware technology. Court documents reveal that they purchased at least 30 different headphone sets from various brands to analyze current market offerings. Additionally, recent months saw meetings and demos involving OpenAI, io, and iyO’s leadership—highlighting a collaborative interest in emerging audio tech.
However, the first hardware product from OpenAI and io might not be a pair of headphones at all. Tang Tan, a veteran Apple executive and io’s chief hardware officer, stated in court that the prototype mentioned by OpenAI CEO Sam Altman isn’t an in-ear or wearable device. Tan emphasized that the design is still in development and is at least a year away from being publicly available.
The exact form factor of this innovative device remains a mystery. Altman has described it as part of a “family” of AI devices with diverse capabilities, while Ive expressed that the initial prototype “completely captured” his imagination. Altman previously hinted that the device would be small enough to fit in a pocket or sit on a desk, with full awareness of a user’s environment—a true third device to complement smartphones and laptops.
“Our goal with this collaboration is to create products that go beyond traditional interfaces,” Altman explained in a court declaration. The companies have explored a wide range of device types, including desktop, mobile, wireless, wired, wearable, and portable options.
While smart glasses from Meta and Google are leading the charge in AI-enabled wearable tech, other companies are exploring AI-powered headphones. Apple, for example, is reportedly developing AirPods with integrated cameras to enhance AI functionalities through environmental data collection.
Recent months have seen extensive research into in-ear devices. Notably, in May, OpenAI’s VP of Product, Peter Welinder, and Tang Tan met with iyO’s CEO, Jason Rugolo, at io’s San Francisco office—located in the trendy Jackson Square neighborhood where Ive has invested in properties to develop projects like LoveFrom and io. During this meeting, Welinder and Tan tested iyO’s custom-fit earpiece, but unfortunately, the demonstration was disappointing as the device repeatedly failed.
Tan clarified that the meeting was a courtesy prompted by a mentor and that precautions were taken to avoid sharing proprietary information, including having lawyers review materials beforehand. Despite this, there was interest in learning from iyO’s partners. For instance, iyO had sent a specialist from The Ear Project to capture detailed ear scans, potentially to inform ergonomic design—though it’s unclear if any agreements materialized.
Efforts to deepen ties between iyO, io, and OpenAI seemed to face hurdles. Rugolo proposed launching iyO’s device as an early developer kit for the final AI hardware and even offered to sell his company for $200 million—yet, according to court documents, these offers were declined. Meanwhile, io’s co-founder and chief product officer, Evans Hankey, clarified that io is not currently developing a “custom-molded earpiece product,” indicating that the company’s first hardware may be quite different from initial expectations.
Overall, OpenAI’s foray into hardware appears to be more than a year away from market release, and the focus may extend beyond in-ear devices to include other innovative form factors, as suggested by ongoing research and legal disclosures. This evolving landscape highlights how AI companies are pushing the boundaries of hardware design, aiming to create the next generation of smart, integrated devices.
