OpenAI Erases Jony Ive’s AI Gadget After Court Order

OpenAI’s rapid sprint into consumer hardware hit a legal speed bump this weekend when the company removed all promotional materials for its planned $6.5 billion takeover of Jony Ive’s startup, io. The purge occurred late Sunday, June 22, 2025, after a federal judge raised the prospect of a temporary ban on the “IO” brand while a trademark dispute with Google X spinoff iyO Inc. is pending.

The San Francisco order forced OpenAI to pull a glossy nine-minute video starring CEO Sam Altman and the famed former Apple designer, scrub its press blog, and even wipe social channels clean. OpenAI said the takedown is only “temporary,” yet the public vanishing act casts doubt on how soon the AI lab can start selling the screen-less gadgets that engineers on both sides of the dispute hope will define the next wave of voice-first computing.

Court-Ordered Takedown

OpenAI acknowledged the deletion, telling reporters that it had temporarily taken down the pages due to a court order. However, it “respectfully disagrees” with the underlying complaint and is “reviewing its options.” The company insists the IO acquisition itself “remains intact,” but that pledge now collides with a lawsuit accusing OpenAI of rolling over a smaller rival’s brand equity.

iyO Inc.—formed by alumni of Alphabet’s secretive moon-shot lab—sued on June 9, 2025, claiming OpenAI, Altman, Ive, and their hardware unit “IO Products, Inc.” lifted its mark and goodwill. In the 46-page filing, iyO Inc. filed suit alleging “willful infringement” of U.S. Trademark Reg. No. 7,409,119 and seeks an injunction, damages, and legal fees.

The lawsuit paints the brand clash as deliberate. According to the plaintiff, OpenAI executives were aware of the iyO brand “since at least 2022,” having met repeatedly with founders and even requested technology details before unveiling IO weeks later—an allegation that OpenAI denies. Knew about iyO since 2022, the filing states, making any overlap “no coincidence.”

A $6.5 Billion Bet on AI Hardware

The fight poses a threat to OpenAI’s most considerable gamble outside of pure software. On May 21, 2025, OpenAI announced its largest-ever acquisition of $6.5 billion of Ive’s two-year-old hardware firm. The stock-only deal was structured as $5 billion in equity plus the value of OpenAI’s pre-existing 23 percent stake.

The tie-up promised to bring 55 engineers and LoveFrom’s design team inside OpenAI to craft a family of “ambient” AI devices. Ive’s crew had sketched prototypes aimed at letting users talk to ChatGPT with no screen, keyboard, or camera in sight—betting that unobtrusive form factors would win trust where chunky headsets and spy-camera glasses failed.

Legal powerhouse Wachtell Lipton, advising OpenAI, helped draft the agreement, but the closing still hinges on regulatory approvals. Now, judges, not regulators, may decide which logos ship on the finished product.

Trademark War in Silicon Valley

iyO argues the two-letter “IO” mark, when attached to competing ear-worn assistants, invites confusion—especially given both companies target early adopters in the same developer circles. The suit alleges willful infringement of its trademark and blasts OpenAI for allegedly “strong-arming” a smaller player.

OpenAI counters that “io” is generic tech jargon and that consumers can tell the difference. Yet, in a June 18 hearing, U.S. District Judge Trina L. Thompson signaled that she might agree confusion has already taken hold—despite zero IO products in stores. She asked lawyers to sketch boundaries for a temporary restraining order if she grants it’s requestst.

Allegations of Confidential Information Misuse

Beyond the name, iyO claims OpenAI mined its roadmap. Founders allege Altman and Ive’s lieutenants sat through multiple demos, praised “iyO ONE’s promise,” and pressed for schematics while eyeing a possible investment round. Weeks later, OpenAI unveiled IO and boasted of “redefining ambient computing,” actions iyO calls a brazen hijack of trade secrets. OpenAI denies it solicited proprietary data. Litigation filings will test which e-mails, slide decks, or meeting notes support either narrative.

Battle of Voice-First Wearables

iyO’s flagship, the iyO ONE ear-worn computer, clips behind the ear and pairs a bone-conduction speaker with a cloud AI that reads messages, searches the web, and drafts replies. Under the carbon-fiber shell sits a triple-driver, 20-micron device running a 4nm ARM chip with LTE and Wi-Fi—no screen, no camera—just voice.

OpenAI and Ive pitch IO devices in nearly identical terms: discreet buds that melt into daily life and summon ChatGPT on command. If both products reach the market, analysts expect a marketing shootout reminiscent of the early smartphone wars—only this time, the entire interface is verbal. With Amazon, Humane, Rabbit, and Meta all chasing “Invisible AI,” any delay could cost the first mover mindshare.

Corporate Reshuffle Complicates Matters

Behind the scenes, OpenAI is rewriting its charter. The nonprofit’s board voted in February to transition to a public benefit corporation, issuing ordinary shares while giving nonprofit trustees super-voting rights. The goal is to raise billions without letting outside investors steer the mission. Critics counter that dual-class structures entrench insiders and muddy accountability—concerns now magnified by the emergence of new IP risks.

The restructuring also raises a practical question: which entity—nonprofit or PBC—faces liability in the iyO suit? Legal experts say the answer could shape the scope of discovery and damages, further complicating settlement talks.

What Happens Next?

Judge Thompson said she would rule “promptly” on the restraining order request, signaling a decision within weeks. If she bars the “IO” mark, OpenAI may need an emergency rebrand before holiday-season hype ramps up. That could push hardware timelines into 2026 and dent investor confidence in OpenAI’s hardware pivot.

iyO, meanwhile, must prove it can scale production and ship before Giants steamrolls its head start. Venture backers whisper about a C-round that could top $300 million if the startup wins a clear path to market—or a lucrative settlement. Whatever the outcome, the fight underscores how two vowels can spark a billion-dollar brawl when the voice wears the crown.

Key Takeaways:

• A federal court order forced OpenAI to scrub all IO branding from its website on June 22, 2025, while a trademark suit with iyO Inc. proceeds.
• iyO says OpenAI has known about its brand since 2022 and is “willfully” infringing a registered mark, while OpenAI argues the letters are generic.
• The disputed $6.5 billion IO acquisition, announced in May, remains on the books but faces fresh uncertainty.
• Judge Trina L. Thompson is weighing a temporary ban on OpenAI’s use of “IO,” a ruling that could derail product launch plans.
• Both companies target the same market for screen-less, voice-activated AI wearables, raising the stakes for first-mover advantage.
• OpenAI’s shift to a public-benefit corporation introduces governance complexities that may impact who bears liability and how investors respond.