While Apple reportedly scrambles to license Google Gemini for Siri, OpenAI quietly acquires Jony Ive’s hardware startup io and poaches top-tier Apple talent to build the real next-gen device wave.

Setting the Scene: The Talent Exodus

In the pantheon of Silicon Valley scuffles, the latest act is hardly subtle. This summer, OpenAI snapped up the hardware startup “io,” founded by ex-Apple design titan Jony Ive, in a deal reportedly worth around in the region of $6.5 billion. That would be bold enough on its own, but herein lies the rub: OpenAI did not stop at the deal. It also embarked on a sweeping raid of Apple’s hardware and engineering teams. Bloomberg indicates that the past month alone has seen more than 40 new employees for its devices group, many of them from Apple.

That kind of talent transfer isn’t the usual skirmish of mid-level defections, it involves high-profile names from Apple’s hardware division, including former industrial-design head Evans Hankey and hardware engineering exec Tang Tan.

In short: OpenAI isn’t just beefing up, it seems to be building a full-blown consumer-hardware capability, and it’s taking Apple’s best minds to do it.

Why Apple Might Be Shaking

This is not just about brains leaving the building. This is about what it says. The poaching comes at a time when Apple appears to be stumbling in the AI race.

For example: According to Bloomberg, Apple’s upcoming iOS 27 update is described as “Snow Leopard-style”, focusing on polish, performance and AI rather than major feature leaps. Snow Leopard was a 2009 Mac OS update that offered significant performance enhancements rather than new features and that focused on improving stability and speed.

Even more telling: Apple is reportedly in talks to license Google’s Gemini model to power a revamped version of Siri, to the tune of $1 billion per year.

That means the company known for bespoke hardware and end-to-end integration may soon lean heavily on external AI models. Meanwhile, its own talent is trickling out the door. That’s not exactly confidence-inspiring.

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What OpenAI Is Building

Historically, OpenAI has been all software: GPT-4, ChatGPT, large language models. But the acquisition of Ive’s “io” and the mass hiring of hardware talent change the game. The hires go far beyond mid-level engineers. OpenAI has picked up senior leaders, directors, and seasoned specialists drawn from almost every major hardware team at Apple.

In other words: OpenAI may be gearing up to deliver a full-blown AI-device lineup, think hardware optimized for generative AI, designed by the very folks who helped define Apple’s aesthetic and manufacturing playbook.

Apple’s AI Strategy: Catching Up or Falling Behind?

Apple’s position right now looks like this:

  • It has long promoted its internal “Apple Intelligence” initiative, but certain AI improvements (especially to Siri) have been delayed into 2026.
  • To compensate, Apple is negotiating to license Google’s Gemini model (with 1.2 trillion parameters) to power Siri.
  • But talent is moving out. Engineers who might have worked on Apple-designed AI hardware are now lining up with OpenAI.

So when Apple touts “vertical integration”, the reality looks messier. Outsourcing AI model design to Google, while losing hardware talent to OpenAI, doesn’t exactly reinforce the image of being in command.

Why This Talent War Matters

In the near term, this might seem like a boardroom skirmish. But the implications are broader:

  • Hardware matters again. AI is not just about code; it’s about the silicon, the device, the design. Having a few top engineers doesn’t guarantee success, but what OpenAI is doing suggests it believes hardware is the next frontier.
  • Ecosystem power shifts. Apple built a powerful lock-in ecosystem. But if it can't execute hardware + AI, competitors (and newcomers) can disrupt.
  • Talent is the raw material. Hiring ex-Apple engineers gives OpenAI not just skills but institutional culture, know-how, supply-chain networks, manufacturing insight, all critical in hardware.

Final Take

OpenAI is quietly positioning itself as more than “just” the maker of ChatGPT. By acquiring Jony Ive’s startup and poaching Apple’s brain trust, it may be plotting the next generation of devices where AI is baked in, not bolted on. Meanwhile, Apple, once the standard-bearer for device innovation, is forced into a reactive mode: licensing AI models from rivals, scrambling to hold onto talent, and shipping software updates that focus on performance rather than feature bombs.

Watch this space.

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Source: Finance Magnates