OpenAI is reportedly considering buying a consumer electronics startup led by Jony Ive, Apple Inc.’s former chief design officer.

The Information late Sunday cited sources as saying that the deal could be worth more than $500 million. However, the insiders cautioned that OpenAI may eventually opt for a partnership instead of an acquisition. Ive’s company, which is called io Products, is believed to be developing a phone-like device with artificial intelligence features and no screen.

Best known for designing the iPhone, Ive joined Apple in 1992 and went on to spend nearly three decades at the company. He also designed the iPod, Mac and lesser-known Apple products such as the Newton PDA. One of Ivy’s last projects at the company saw him help plan its $5 billion headquarters in Cupertino, California.

Ive left Apple in 2019 to launch a design studio called LoveFrom. It’s unclear whether the studio is affiliated with io Products, the Ive-led company that OpenAI is reportedly considering buying. Both firms are reported to be developing AI-powered devices.

According to some of The Information’s sources, io Products may develop a “phone-like product without a screen.” Other insiders, however, are reportedly “adamant that it is not a phone.” The product’s design is said to be in an early stage of development.

It’s believed io Products may also seek to create AI-powered smart home appliances. There’s no word on what tasks those devices would perform or the manner in which they might use AI.

LoveFrom, the design studio that Ive launched after leaving Apple in 2019, reportedly also weighed building an AI-equipped consumer device at one point. In 2023, rumors emerged that Ive had held talks with OpenAI Chief Executive Officer Sam Altman about the gadget. In 2024, sources told The Information that the former Apple executive may seek to raise $1 billion from SoftBank Group Corp. for the project.

Screenless AI devices have been a focus for Altman since at least 2023. That year, he backed a funding round for Humane Inc., a startup with an AI-powered brooch. The device lacked a display and instead used a miniature projector to show content on the user’s palm. HP Inc. acquired some of Humane’s assets for $116 million earlier this year after its brooch failed to draw the expected interest.

Entering the consumer electronics market by acquiring io Products would potentially enable OpenAI to create a new revenue stream. Currently, the company generates practically all its revenue from ChatGPT and its application programming interfaces for developers. According to CNBC, OpenAI expects to end the year with $12.7 billion in sales.

Consumer gadgets power their AI features using models that run either in the cloud or on-device. The latter approach is often more practical: On-device algorithms work even if there’s no reliable internet connection. Should OpenAI enter the consumer electronics market with io Products’ help, it may seek to develop lightweight AI models capable of running locally on consumer devices.

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