Court documents from an ongoing trademark lawsuit have shed new light on OpenAI’s collaboration with Jony Ive’s hardware startup, io, on a yet-to-be-released AI device. The dispute, initiated by iO—a Google-backed startup developing custom in-ear devices—accuses OpenAI and iO of trademark infringement. In response to a court order tied to the lawsuit, OpenAI recently removed promotional materials related to its $6.5 billion acquisition of io.
Filings in the case reveal that for over a year, OpenAI executives and former Apple leaders now working at io have been researching in-ear and other hardware solutions. They reportedly acquired around 30 headphone models to analyze current market offerings. Interestingly, the two companies even met with iYo leadership and tested its in-ear technology. Despite these interactions, OpenAI claims its prototype device, discussed in io’s launch video, is “neither an in-ear nor a wearable device,” according to Tang Tan, io’s co-founder and Chief Hardware Officer.
Prototype Plans Suggest Device Is Not Wearable
OpenAI CEO Sam Altman and renowned designer Jony ive’s have offered only vague hints about the nature of their joint hardware ambitions. Altman described the goal as creating a “family” of AI-powered devices capable of contextual awareness, possibly acting as a “third device” alongside users’ smartphones and laptops. In court declarations, Altman emphasized that the company aims to transcend conventional interfaces, suggesting a unique approach to consumer AI integration.
According to Tan, the prototype in question is still in early development, with no finalized design and no plans for a product launch shortly. Altman reportedly told employees the final product might sit on a desk or fit in a pocket, reinforcing the notion that it will not be a wearable. The companies are exploring a wide variety of options, including mobile, desktop, wireless, and even wired formats. Despite growing interest in AI-powered smart glasses and headphones in the broader tech industry, OpenAI and io appear to be charting a different course.
Failed Partnership Talks and Competitive Tensions
The lawsuit also exposes behind-the-scenes meetings and failed negotiations between IYO and the Altman-Jony ive’s partnership. On May 1, Peter Welinder, OpenAI’s VP of Product, and Tang Tan met with iyo CEO Jason Rugolo to evaluate iyo’s custom-fit earpiece technology. However, emails reveal that the product malfunctioned during the demonstration, disappointing the visitors. Tan later clarified that he agreed to the meeting out of respect for a former Apple mentor and took steps to avoid absorbing proprietary information.
Further email correspondence showed that IO’s engineers expressed interest in acquiring 3D ear scan data from IO’s partner, The Ear Project, as a starting point for ergonomic research. Despite these signs of interest, OpenAI and io ultimately declined Rugolo’s offers, which included launching io’s hardware as a developer kit, investment opportunities, and even a $200 million acquisition proposal.
In court declarations, iIOexecutives firmly stated they are not pursuing a custom-molded earpiece product. As of now, OpenAI’s first hardware device remains at least a year away from commercialization, and its final form remains an industry mystery.
