admin The move underscores how the contest over AI is no longer confined to software models, cloud computing capacity and data centres. It is spreading into industrial design, hardware engineering and the race to define what an AI-native device might look like. OpenAI’s $6.5 billion acquisition of io Products, the startup founded by former Apple design chief Jony Ive, marked a turning point in that shift by pairing one of Silicon Valley’s most recognisable product designers with one of the most powerful AI developers. Reuters reported that the deal brought Ive in as creative head and deepened OpenAI’s ambition to build devices tailored to the generative AI era.
Apple’s retention effort reflects growing concern that its design bench, long seen as a strategic advantage, is becoming a hunting ground for competitors. Bloomberg reported that the bonuses were aimed at hardware designers working on the iPhone, an unusually targeted step for a company that typically relies on regular annual stock refreshers and the prestige of working on its flagship products. The awards, ranging from roughly $200,000 to $400,000 in restricted stock units, suggest Apple believes standard compensation may no longer be enough in a market where AI ventures are dangling faster career trajectories and, in some cases, richer pay packages.
Pressure on Apple has been building for more than a year. Tang Tan, a senior executive who led design for the iPhone and Apple Watch, left Apple to work with LoveFrom, Ive’s design firm, in late 2023, according to Reuters. Since then, the broader design and AI landscape around Apple has become more fluid. Reuters also reported in December that Meta hired Alan Dye, Apple’s longtime head of human interface design, in another sign that major technology groups are trying to lock in senior creative talent as devices, interfaces and AI services converge.
OpenAI’s own hardware plans have added urgency. Reuters reported in February that the company had more than 200 people working on a family of AI-powered devices, including a smart speaker as its first planned launch, with smart glasses and other form factors also under consideration. Earlier reporting by Reuters said OpenAI had also lined up supply-chain support from Luxshare, a key Apple assembler, for a prototype consumer device designed to work closely with its AI models. That creates a new kind of competitive threat for Apple: not just a better chatbot, but a rival ecosystem built around purpose-made hardware.
For Apple, the timing is awkward. The company remains hugely profitable and deeply entrenched in consumer electronics, yet its AI strategy has appeared hesitant compared with peers. Reuters reported in March 2025 that Apple delayed some of its promised Siri upgrades until 2026, and subsequent Reuters reporting described a company facing setbacks in its AI efforts, including leadership changes, lukewarm reception to early generative AI tools and questions from investors over whether it has moved quickly enough. A Reuters report in January said Apple and Google had entered a multi-year Gemini deal for Siri, illustrating how Apple has increasingly leaned on partnerships even as it tries to build more capability in-house.
That does not mean Apple is losing the broader battle. Its advantages remain formidable: a vast installed base, tight control over hardware and software, a premium brand, deep silicon expertise and a history of turning late entries into mass-market successes. Rivals chasing AI hardware still face the hard economics of consumer devices, where manufacturing, battery life, heat management and user habits can derail bold ideas. Reuters noted that Humane’s AI Pin faltered badly, while Rabbit’s r1 generated interest but still faced questions over utility when measured against smartphones. Those setbacks are a reminder that replacing or even meaningfully reshaping the smartphone remains one of the toughest challenges in technology.
