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OpenAI announced on May 21 that it will acquire Jony Ive’s artificial intelligence hardware startup io in an all-equity transaction valued at approximately $6.4 billion, according to a report by CNBC.

The acquisition, OpenAI’s largest to date, marks a decisive step into hardware for the company best known for its generative AI models. The deal incorporates io directly into OpenAI.

Meanwhile, Ive, a former Apple design chief, will retain independence for his design firm, LoveFrom.

Ive is credited with designing the iPhone, iPad, and other key Apple products. He will assume design and creative responsibilities across OpenAI and io. 

Integration into AI and product teams

In a joint statement, OpenAI CEO Sam Altman and Ive said the io team will relocate to San Francisco to work closely with OpenAI’s research and product teams.

The io startup, founded a year ago by Ive and former Apple colleagues Scott Cannon, Tang Tan, and Evans Hankey, was previously operated as part of LoveFrom.

OpenAI currently owns a 23% stake in io, contributing $1.4 billion to the deal’s valuation. The remaining $5 billion will be transferred in equity. 

The transaction will bring io’s device-focused team in-house, adding industrial design capacity to OpenAI’s portfolio. In a statement shared on X, Altman described Ive as “the greatest designer in the world.”

The deal comes weeks after OpenAI agreed to acquire Windsurf, an AI coding assistant, for $3 billion.

Hardware investments

Alongside its in-house efforts, OpenAI has invested in Physical Intelligence, a San Francisco-based robotics startup that raised $400 million in 2024 at a valuation of $2.4 billion.

That round included participation from Amazon founder Jeff Bezos. Physical Intelligence is building general-purpose AI to operate in physical environments, suggesting OpenAI’s broader intent to pair software with tactile systems.

The acquisition of io reinforces that direction. While OpenAI did not disclose specific products, the blog post referenced devices that “inspire, empower, and enable,” and emphasized IO’s mission to translate AI capabilities into consumer-oriented form factors.

OpenAI’s purchase of io highlights its strategy to build out physical interfaces for its models, as the competitive field in generative AI continues to widen with entries from Google, Anthropic, and xAI.

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Over the last few months, shares of Tesla (TSLA -4.68%) have been on quite a ride. Following President Donald Trump’s election victory on Nov. 5, shares of Tesla soared by as much as 91%. Tesla co-founder and CEO Elon Musk’s close relationship with the president has largely been seen as an asset — specifically as it relates to potentially more friendly regulations for the electric vehicle (EV) company’s ambitions around autonomous driving.

However, since the start of the year, shares of Tesla have given back some of their election-driven gains. So far in 2025, the stock is down about 10% as I write this.

Let’s look at some of the factors influencing Tesla stock of late and I’ll make the case for why now is a terrific opportunity to buy the dip hand over fist.

What’s driving Tesla stock off course?

A combination of things have weighed on Tesla stock over the last several weeks. For starters, the company’s fourth-quarter and full-year 2024 financial results were less than stellar. While the company’s energy storage and services business shined, the core EV operation floundered. Sales from EVs declined by 6% year over year, leading some investors to increase pessimism about the strength of the economy as well as Tesla’s position relative to competition both domestically and overseas, particularly in China.

On top of that, Trump has already made good on one campaign promise: imposing tariffs. And he’s threatened more. One of the countries facing new tariff policies is China, which is a major market for Tesla. Given how new these policies are, there are a lot of unknowns revolving around how different countries will respond and how trade could be impacted. This is all to say that Tesla could theoretically be negatively impacted by new tariff discussions.

Lastly, Musk has been spending quite a bit of time in Washington as he leads Trump’s cost-saving “Department of Government Efficiency” initiative. His time spent in Washington has led some investors to worry that he may be too distracted and focusing less on Tesla.

I’ll admit that all three of the points hold some merit. But before hitting the panic button, let’s regroup and consider some other topics.

Keep the long-term agenda in focus

Despite a lackluster earnings report, Musk did his usual on the call and managed to get investors excited about Tesla’s future. He spent the majority of the call talking about artificial intelligence (AI), and how Tesla is using the technology to hone its self-driving car software as well as build a fleet of humanoid robots called Optimus. These areas are where Wall Street seems to be focusing.

Dan Ives leads technology research at Wedbush Securities, and on Feb. 12, Ives published a short research note in which he acknowledged the risks I described above but ultimately made the case for why he’s sticking to a bullish narrative for Tesla.

Ives said a “deregulatory landscape” under the Trump administration will unlock $1 trillion of value for Tesla’s autonomous driving project. With a 12-month price target of $550, Ives is suggesting that Tesla stock could soar 52% from its current levels.

I tend to agree with Ives on this one. In my eyes, the amount of time Musk spends in Washington is independent of any existing projects at Tesla. For example, Tesla is planning to launch unsupervised full self driving (FSD) services in Austin come June. Unless there is an unforeseen product snag, I don’t see this timeline changing just because Musk is spending a lot of time away from Tesla’s physical headquarters.

To me, the long-term narrative for Tesla’s future — namely, its goal to become an AI powerhouse — hasn’t changed at all. The only thing that has changed, however, is the perception surrounding Tesla given Musk’s latest passion project in D.C.

I still see Tesla as compelling opportunity to buy and hold for long-term investors, and I would consider scooping up shares during the ongoing sell-off.