OpenAI pushes AI hardware launch to 2027 and abandons io brand after trademark dispute

The move from pure software to integrated hardware has long been the anticipated final frontier for OpenAI, the organization that catalyzed the current generative artificial intelligence boom. However, recent developments indicate that the company is facing significant headwinds in its attempt to deliver a physical product.[1][2][3][4][5][6] According to recent legal disclosures and industry reports, OpenAI has officially pushed the launch of its first AI-powered consumer device to 2027.[2] This delay coincides with a major branding pivot, as the company has abandoned the io designation for its hardware venture following a protracted trademark dispute with a smaller startup. The shift reflects both the legal complexities of the burgeoning AI market and the immense technical challenges inherent in creating a new category of personal electronics that does not rely on traditional screens or interfaces.[7]

The abandonment of the io branding was not a purely creative choice but a legal necessity born from a high-profile trademark infringement lawsuit. The conflict arose when a startup called iyO, which specializes in wearable audio computers, challenged OpenAI’s use of a nearly identical name.[8][9] Court filings from the Ninth Circuit Court of Appeals recently upheld a temporary restraining order, ruling that there was a significant likelihood of consumer confusion between the two brands. OpenAI had reportedly acquired a startup also named io for an estimated 6.5 billion dollars to serve as the foundation for its hardware efforts.[10][11][12] Despite this massive investment, the organization has informed the court that it will no longer use the name in any advertising, marketing, or sales for its upcoming hardware products. This legal setback forced the disclosure of the revised 2027 timeline, revealing that OpenAI has yet to even begin developing the packaging or final marketing materials for the device.[13]

At the heart of this hardware push is an unprecedented collaboration between OpenAI CEO Sam Altman and legendary former Apple designer Jony Ive.[14] Working through Ive’s design firm, LoveFrom, the team has been attempting to develop what some have described as the iPhone of artificial intelligence.[15] The project has attracted immense financial interest, with reports indicating a funding goal of up to 1 billion dollars and involvement from SoftBank CEO Masayoshi Son.[16][7][17][18] However, the design philosophy has undergone several iterations. While early speculation suggested OpenAI might release an in-ear wearable or a high-tech pendant similar to the ill-fated Humane AI Pin, current reports suggest the focus has shifted toward a pocket-sized or desk-based third core device. This gadget is intended to exist alongside the smartphone and the laptop, functioning as a screenless, contextually aware companion that can interpret the user's environment through integrated cameras and microphones.

Technical hurdles are a primary driver behind the extended development cycle. Designing the personality and behavioral nuances of an AI companion has proven more difficult than simply training a large language model. Internal reports suggest that the engineering teams are struggling to strike a balance between a helpful assistant and a presence that feels intrusive or overly humanized.[4][1] The goal is reportedly to create a friend who is a computer but specifically avoids the social pitfalls of previous AI companions that users found off-putting or sycophantic.[5][4] Beyond the software's vibe, the physical requirements of an always-on AI assistant are straining current hardware limits.[7][5][1] Running advanced models locally requires significant high-bandwidth memory and sophisticated thermal management systems to prevent the device from overheating in a user's pocket. These power demands are currently at odds with the desire for a sleek, discreet industrial design characteristic of Ive’s portfolio.

Furthermore, the global supply chain has presented an ironic obstacle for the very company that triggered the AI hardware gold rush.[6] The explosion of data center construction and the massive demand for enterprise-grade chips have led to a critical shortage of high-bandwidth memory (HBM).[6] Because OpenAI’s data operations consume such a large portion of the available silicon and memory supply, consumer-focused projects have been deprioritized in favor of maintaining the cloud infrastructure that powers ChatGPT. Industry analysts have noted that prices for the specific types of RAM needed for high-performance mobile AI have jumped significantly, making a mass-market launch financially unfeasible in the current economic climate. By pushing the release to 2027, OpenAI likely hopes for a stabilization of the supply chain and the emergence of more energy-efficient processors tailored for agentic AI tasks.

Privacy also remains a central point of contention for a device that is designed to be always listening and watching.[1][4] Unlike smartphones, which users generally understand are collecting data through apps, a screenless AI device that relies on environmental awareness raises new ethical questions. OpenAI is reportedly navigating how to implement recording indicators and data processing protocols that satisfy both regulatory requirements and consumer trust. The company is wary of the backlash faced by other AI hardware startups whose products were criticized for being invasive. Given that OpenAI does not yet own its own proprietary cloud hardware infrastructure on the scale of Amazon or Google, building a secure and scalable backend for millions of always-connected personal devices is a monumental task that requires several more years of development.

The broader implications for the AI industry are profound. The failures of first-generation AI gadgets like the Rabbit R1 and the Humane AI Pin have demonstrated that consumers are not willing to adopt half-baked hardware that merely acts as a physical shortcut to a chatbot. By delaying until 2027, OpenAI is signaling that it intends to bypass the gadget phase and move straight to a transformative platform. This strategy allows the company more time to develop GPT-5 or even more advanced models that possess true agentic capabilities—the ability to perform complex tasks across different services without human intervention. If OpenAI can successfully integrate its software into a bespoke device designed by the world’s most famous industrial designer, it could potentially circumvent the gatekeeping of Apple and Google, which currently control the mobile ecosystems through their respective app stores.

As the tech world looks toward the end of the decade, the 2027 launch window suggests that the next major shift in personal computing is still in its nascent stages. The rebranding effort, while necessitated by a legal dispute, offers OpenAI a chance to distance itself from early prototypes and establish a more sophisticated identity for its physical products.[2] While the absence of a catchy name like io may seem like a temporary setback, the real challenge lies in whether the combined genius of Sam Altman and Jony Ive can produce a device that justifies its existence in a world already dominated by the smartphone. For now, OpenAI remains a software-first giant, with its hardware ambitions serving as a high-stakes, long-term gamble on the future of human-machine interaction.