OpenAI's New Chapter: Partnering with Jony Ive on an "iPhone Killer" Free from Microsoft's Influence

According to a report from Wccftech on October 28, OpenAI has renegotiated its partnership with Microsoft, establishing a new collaborative relationship. While Microsoft secures an approximate 27% stake and certain technology IP in the new agreement, it has been explicitly excluded from any involvement in OpenAI's consumer hardware ventures.

This corporate restructuring has also seen the original non-profit organization renamed as the OpenAI Foundation, while its for-profit entity has been transformed into a Public Benefit Corporation (PBC) called the OpenAI Group. Crucially, the non-profit Foundation retains ultimate control over the for-profit company, creating an institutional barrier between its commercial development and its public-interest mission.

The new agreement clarifies the equity structure. The OpenAI Foundation currently holds about 26% of OpenAI Group's shares, valued at approximately $130 billion. Its largest external investor, Microsoft, holds a stake of around 27%, worth about $135 billion. The remaining 47% is held by current and former OpenAI employees and early investors. The deal also includes a clause granting the OpenAI Foundation a "substantial" equity incentive if the Group's stock price increases more than tenfold after 15 years.

Under the terms of the new agreement, Microsoft will no longer have any decision-making authority over OpenAI's future consumer-grade hardware projects. This grants OpenAI complete autonomy to independently develop its much-anticipated "iPhone killer" device. To this end, OpenAI has been collaborating with former Apple Chief Design Officer Jony Ive to create a revolutionary AI device intended to disrupt the existing smartphone form factor.

To accelerate this project, OpenAI acquired Jony Ive's AI device startup, io, for $6.4 billion in May 2025. The company also hired approximately 24 core employees from Apple, including key talents such as manufacturing design expert Matt Theobald and human-computer interface design lead Cyrus Daniel Irani.

Based on current information, the OpenAI-led consumer AI device will feature several disruptive characteristics. It is expected to be a screenless, pocket-sized portable device, rather than a traditional wearable. It will be equipped with a camera, microphone, and a suite of other sensors to enable powerful contextual awareness. The device will run custom-tailored AI models locally, access cloud computing for complex tasks, and communicate with other devices much like a smartphone.

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