AI Hardware Showdown: OpenAI in Court
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AI Hardware Showdown: OpenAI in Court
The quiet race to reimagine our relationship with AI has suddenly become loud and widely known. At the center of this legal drama is OpenAI, known for building some of the world’s most powerful AI tools. The company, now working with legendary iPhone designer Jony Ive, is facing serious legal pushback over a mysterious new hardware project.
The idea behind it is big: move away from screens and smart speakers, and create a more natural, seamless way to connect with AI. Think of it as the future of communication—an AI interaction device that feels more human.
One startup says the idea was theirs first.
The tech startup iyO Inc. is suing OpenAI, Ive, and CEO Sam Altman for secretly developing its own AI hardware. They claim OpenAI’s newly announced venture—called “io Products”—uses a name and ideas that are strikingly similar to their own. OpenAI reportedly acquired the io venture for a staggering $6.5 billion.
A federal judge recently sided with iyO—at least enough to let the case move forward. The judge also ordered OpenAI and its partners to stop using the “io” branding for now. That includes taking down the new venture’s web content until a hearing later this year.
The legal heat didn’t stop there
iyO recently filed a second case, this time alleging that Dan Sargent, a former executive, shared private product information. Sargent, now with Apple, allegedly met with one of the designers behind “io” after leaving iyO—a designer closely linked to Jony Ive.
Jason Rugolo, CEO of iyO, says he pitched his early AI interaction device designs to teams tied to Altman and Ive back in 2022. Later, at a TED Talk, he shared the idea with the world. According to Rugolo, he never thought things would get to this point.“We’re not trying to make enemies,” he said. “But we can’t stay quiet when we believe someone used their power to take our work.”
Inside the Legal Showdown Over the Next Big AI Interaction Device
Altman, for his part, says the name “io” comes from the term “input/output” and that he and Ive came up with it independently. He also pointed out that other companies—like Google—have used the I/O name before. According to him, OpenAI bought the io.com domain in 2023 with a plan to build something entirely new.
What that something is—an AI interaction device that changes how we talk to machines—remains tightly under wraps. But it’s clear this battle isn’t just about a name. It’s about who gets to shape the future of how we connect with AI.
