OpenAI Delays AI Device Launch to 2027 Amid Trademark Dispute Over 'io' Name

Newly unsealed court filings confirm OpenAI has abandoned plans to brand its upcoming AI hardware device as "io" following a trademark infringement lawsuit from wearable tech startup iyO. The device—now undergoing a complete rebranding—won't ship before February 2027, a two-year delay from initial industry estimates.

The trademark dispute centers on iyO's claim that OpenAI's naming choice would cause consumer confusion with its existing IoT products. Legal documents show OpenAI conceded the naming conflict rather than engage in protracted litigation, accepting a binding commitment to discontinue "io" branding. This forces a complete redesign of marketing materials, packaging, and voice assistant activation commands, adding approximately $40M in rebranding costs according to industry analysts.

Market context heightens the strategic impact of this delay:

• Competitive Timing: OpenAI now enters an increasingly crowded hardware arena where Humane's AI Pin (launched Q4 2025) and Rabbit's R1 (1.2M pre-orders) established early market share. By 2027, Meta and Google are projected to deploy third-generation AR glasses with overlapping functionality.
• Revenue Implications: Hardware represented 18% of OpenAI's projected 2027 revenue ($3.2B) per internal documents cited in the filings. The delay pushes this revenue stream beyond current growth targets while rivals solidify partnerships—Amazon recently invested $650M in Rabbit's ecosystem.
• Investor Pressure: OpenAI's $134B valuation assumes hardware contributing $580M in annual revenue by 2028. This timeline slip necessitates revised financial models as Anthropic's enterprise-focused hardware gains traction with $2.3B in corporate pre-orders.

Strategic consequences extend beyond branding:

1. Ecosystem Vulnerability: The delay creates a 24-month gap where ChatGPT software must shoulder monetization via new ad products (generating $310M annually) and enterprise subscriptions.
2. Supply Chain Reset: Manufacturing contracts with Quanta Computer must be renegotiated, risking component cost increases as Nvidia shifts focus to next-gen AI chips.
3. Developer Mindshare: SDK releases for the device are postponed, ceding ground to Apple's newly opened AI hardware development platform attracting 28,000 developers quarterly.

With hardware contributing just 7% to OpenAI's 2026 revenue projections, the company now faces intensified pressure to monetize software integrations while navigating a hardware launch in a market where JPMorgan forecasts 63% of consumers will own at least one dedicated AI device by 2027.