A Silicon Valley supergroup is coming together to create an AI device

Since founding OpenAI in 2015, Sam Altman has spent many days thinking that the company's generative artificial intelligence products need a new kind of device to succeed. Since leaving Apple in 2019, Jony Ive, the designer behind the iPhone, iPod and MacBook Air, has been considering what the next great computing device could be.

Now, the two men and their companies are teaming up to develop a device that would succeed the smartphone and deliver the benefits of AI in a new form factor, unconstrained by the rectangular screen that has been the dominant computing tool of the past decade, according to two people familiar with the discussions.

The project was described as preliminary, but Altman and Ive have developed some early concepts and sought as much as $1 billion in funding from SoftBank, the Japanese technology investor led by Masayoshi Son, the people said. With SoftBank's support, the two men could tap into the semiconductor expertise of Arm, the British chip design company Son bought in 2016 that recently went public.

The business structure behind the project remains unclear. Altman's company, OpenAI, is an AI research lab in San Francisco spanning roughly 400 researchers, engineers and support staff members, while Ive's San Francisco design firm, LoveFrom, has about three dozen industrial and software designers, as well as some engineers.

The talks have been going on for much of this year and were previously reported by The Information, a tech publication, and The Financial Times.

The partnership speaks to the way that generative AI is upending the status quo in Silicon Valley. Since the introduction of OpenAI's online chatbot, ChatGPT, late last year, companies have been scrambling to reinvent their businesses and tap into its power to answer questions; write emails, presentations and poetry; and even generate computer code.

Many tech executives believe the technology has the power to introduce a new paradigm in computing that they call "ambient computing." Rather than typing on smartphones and taking photographs, they imagine a future device in the form of something as simple as a pendant or glasses that can process the world in real time, using a sophisticated virtual assistant capable of fielding questions and processing images.

Altman had previously invested in a company pursuing that vision called Humane, which was founded by ex-Apple employees Imran Chaudhri and Bethany Bongiorno. They plan to release their device, which they bill as a "disappearing computer," later this year.

One reason Altman may be determined to develop his own device is to avoid having OpenAI depend on Apple or Google's Android for distribution. Relying on other platforms has challenged tech giants, such as Facebook and Amazon, because Apple and Google take a cut of sales across their platform. Apple also has introduced privacy limits, which cut into advertising sales.

But the road to creating new hardware devices is littered with failure. Amazon and Facebook both tried to develop their own smartphones and abandoned their efforts after failing to gain traction.

Few in Silicon Valley have a better track record at developing devices than Ive. He was the driving force behind the company's development of the Apple Watch, the only major new device that the company has introduced since Steve Jobs' death in 2011. In 2019, Ive left the company to start LoveFrom, but he signed a multiyear contract to continue working with Apple.

Last year, Ive and Apple agreed to stop working together. In negotiating the end of their working relationship, Apple and Ive agreed that there would be no limits on the products that he could develop in the future, according to two people familiar with the matter.

An Apple spokesperson declined to comment.