Ive and Altman aim to invent a new class of device, effectively a “ChatGPT computer” with no screen. The first units are expected next year, and Sam Altman believes it will be the fastest device to reach 100m units. It took the iPhone 4 years to hit that milestone and the iPod 5 years.

Based on comments from Sam Altman following the announcement to employees (as reported by WSJ), Ive’s concept is to make it easier to access information by making AI unobtrusive and available everywhere.  The AI assistant becomes the primary user interface, and the physical device “fades away” into the background. Users would simply invoke AI anytime, anywhere, realizing the long-held ambient computing dream Apple has with Siri — and beating them to the punch.

What might these devices look like? The details are secret, but this week’s breadcrumbs from OpenAI help us frame it in. One device could sit on your desktop at times, but also go in your pocket. It will likely be voice-first, relying more on conversational AI for input/output than touchscreens. It will also likely incorporate cameras and sensors, so the AI can see and hear and interpret the user’s surroundings.

Most importantly, Ive’s vision represents a philosophical shift away from the screen-centric paradigm that has dominated consumer tech. Apple’s current roadmap (e.g., Vision Pro or a future AR wearable) centers on screen interfaces — even a yet to be announced AR glasses device would likely project content onto the real world, essentially another form of a screen.

Ive, in contrast, appears to want to go away from that screen dependency. His goal isn’t to create another flashy gadget, but to fundamentally change how we experience tech. That bold vision is what is likely behind his recent comment that the project could be his life’s most important work. While he did not explicitly tie that comment to the iPhone or our collective screen addiction, we believe this work is in part aimed at curbing society’s doom scroll habits by removing screens and getting people back into the real world. This humanistic angle — acknowledging that the iPhone and its descendants (which Ive himself designed) have tethered us to displays — underscores the ambition. “Everything I have learned over the last 30 years has led me to this moment,” Ive said of the opportunity.

Despite his decades at Apple and his reverence for Steve Jobs as a “spiritual partner,” Jony Ive chose to pursue “his best work” outside of Apple.  Several factors played into this:

• AI-First Capabilities: OpenAI brings fundamental puzzle pieces that Apple can’t deliver starting with a world-class foundation model. Apple, for all its hardware expertise, currently lacks a cutting-edge conversational AI platform at the level of ChatGPT. Ive’s device will live or die by its intelligence; building it with OpenAI gives him an AI brain from day one that few companies can match.
• Creative Freedom: At Apple’s massive scale, hardware projects face layers of managment input that can stifle radical ideas. OpenAI takes a more aggressive approach to risk-taking. Based on the announcement video, Ive appears to relish the freedom of building something new from scratch, free of quarterly pressures. He will bring over 50 engineers and designers including Evans Hankey, who was Apple’s VP of Industrial Design (and Ive’s hand-picked successor as hardware design chief), and Tang Tan, Apple’s lead product designer for the iPhone, Apple Watch, and AirPods. This is a dream team of hardware design talent. This project is a labor of love by some of the world’s most accomplished designers.
• Incentives — 2% Equity: OpenAI gave Ive about 2% equity in the company, which valued the team at around $6 billion. In essence, OpenAI is acquihiring Jony Ive in an all stock deal. That is a big reward and vote of confidence, one Apple was unlikely to match for a speculative project. For context, Google paid $3.2 billion to acquire Nest (Tony Fadell’s smart thermostat startup) in 2014, and Apple’s 1997 purchase of NeXT — which brought Steve Jobs back — was only ~$429 million. OpenAI’s deal effectively makes Ive’s team at io one of the priciest talent acquisitions in tech history.

The bull case for OpenAI is that they have all three critical elements of a leading AI platform: infrastructure, data, and distribution. By partnering with Ive, OpenAI has a chance to strengthen its position on two of those fronts: data and distribution. If Ive succeeds in building a compelling hardware/software ecosystem, it could dramatically improve ChatGPT’s value proposition giving OpenAI an edge in the AI race.

Ive’s OpenAI-powered devices are still in development, but their mere existence prompts important questions for Apple, Google and others.

• Apple: Apple’s in a better position than the headlines would suggest. Altman indicated the new devices would sit next to a Mac and an iPhone, not replace them immediately. In other words, we’ll still need the latest and greatest phones and computers in the new paradigm — at least for a while. If OpenAI’s new device category gains traction, it will be fast-growing and OpenAI will have a head start. In that case, Apple’s likely response will be to follow and adapt, just as it did with music players, phones, and wearables. From a company perspective, we expect their AI approach to shift from partner focused to internally focused, which will likely involve a measurable increase in investment. Additionally, this raises the urgency of improving Siri. From a stock perspective, the biggest risk is investor overhang that OpenAI could eventually compete with the iPhone, Mac, AirPods, and Apple Watch, potentially weighing on AAPL’s earnings multiple, just as concerns around AI-driven search have recently weighed on shares of GOOG.

• Google: Google is more at risk given their vulnerability lies in search. Google’s dominance comes in large part from their distribution, which generates over 2 billion daily users. It’s the part of the business that is largely underappreciated by investors. That distribution is so important that the company pays a lot of money, over $50 billion annually (about $20 billion of that going to Apple for default search in Safari), to third parties to maintain search traffic and their 90 percent search market share outside of China. If a family of ChatGPT-powered devices starts answering user queries directly, this could pull time spent away from devices that have Google Search built into them (Mac, PCs, iOS, and Android), which would have revenue consequences. If this new category of AI-powered devices takes off, Google and Samsung, like Apple, would likely be fast followers in an effort to stop the traffic drain. Even still, if search moves to voice, that would move us further away from the blue links that generate about 55% of revenue and 85% of Google’s profits.

• Broader Tech Landscape: Other AI companies like Anthropic, xAI, and Meta don’t have hardware ecosystems. If OpenAI’s new device succeeds, those other model providers will need to follow suit and build a device or partner with a device-maker, like Apple or Samsung.

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