OpenAI and legendary designer Jony Ive are reportedly facing major technical challenges as they race to launch their secretive new AI device, casting doubt on plans for a 2026 debut.
OpenAI And Jony Ive Struggle To Finalize AI Hardware
OpenAI and Ive's design firm, LoveFrom, are working on a palm-sized AI device intended to act as a screenless digital assistant — one that interprets audio and visual cues from its surroundings and responds naturally to user requests.
However, the companies are still grappling with unresolved hardware and software issues, reported the Financial Times, citing people familiar with their plans.
This includes design refinements, user experience and the massive computing power required to operate OpenAI's models in real time.
"Compute is another huge factor for the delay," one person close to Ive told the publication. "Amazon has the compute for Alexa, so does Google [for its Home device], but OpenAI is struggling to get enough compute for ChatGPT, let alone an AI device — they need to fix that first."
The San Francisco-based AI company, led by CEO Sam Altman, acquired Ive's firm io for $6.5 billion in May.
Ive was the designer behind Apple Inc.'s (NASDAQ:AAPL) signature candy-colored desktop computers and the iPhone's distinctive rounded edges. Steve Jobs, Apple's co-founder, once told his biographer Walter Isaacson that Ive wielded more "operational power than anyone at Apple, except me."
Personality, Privacy And Power Problems
The report said the team is debating key decisions about the device's "personality," ensuring it doesn't become intrusive or overly talkative — a problem that has plagued other AI assistants.
"Model personality is a hard thing to balance," one insider said. "It can't be too sycophantic, not too direct, helpful, but doesn't keep talking in a feedback loop."
Privacy also remains a sticking point, as the device is expected to feature multiple cameras and microphones that constantly collect data to improve its virtual assistant's memory.
Altman's Hardware Ambitions Face Reality Check
Despite the setbacks, sources said the delays are typical of early-stage product development. OpenAI's goal is to reinvent the smart speaker category, building a "friend who's a computer" — one that's useful, not creepy.
The device is reportedly being developed with Chinese manufacturer Luxshare and could be assembled outside China.
OpenAI did not immediately respond to Benzinga’s request for comments.
OpenAI Hits $500 Billion Valuation Amid Global Chip Push
OpenAI, now reportedly valued at $500 billion, has also embarked on a sweeping global push across Asia and the Middle East to secure chips, manufacturing partners and funding.
OpenAI reportedly brought in roughly $4.3 billion in revenue during the first half of 2025 — about 16% higher than its total revenue for all of last year. The company is reportedly on pace to hit its full-year revenue goal of $13 billion while keeping cash burn near $8.5 billion.
The $500 billion valuation milestone comes at a critical juncture for the Altman–led firm, which is in talks with Microsoft Corp. (NASDAQ:MSFT) about shifting toward a more conventional for-profit structure.
According to Benzinga's Edge Stock Rankings, MSFT demonstrates an upward price trend over the short, medium and long term. Click here to explore the stock in detail, along with its peers and rivals.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
