Sam Altman, CEO of OpenAI, has revealed private correspondence that sheds light on the ongoing dispute with Iyo, a startup that has initiated legal action against OpenAI regarding its new product, io. On Tuesday, Altman shared email exchanges on X that illustrate a cordial conversation with Jason Rugolo, founder of the Iyo hearing device company suing OpenAI. The correspondence indicates that Rugolo sought Altman’s backing while introducing a competing device.
In a message dated March 4th, Rugolo expressed interest in securing a $10MM investment from Altman for his AI and audio technology venture, iyO. He claimed, “We’re launching the best possible hardware interface to interact with AI agents, after having obsessively focused on this problem since 2018.”
Altman turned down the investment proposal, citing his commitment to a competitive project. Rugolo then inquired whether OpenAI might be open to a partnership, prompting Altman to mention needing to consult with Jony Ive, the former Apple designer involved with the launch, following OpenAI’s acquisition of Ive’s AI hardware company for approximately $6.5 billion.
The discussions continued in May, with Rugolo addressing some issues that arose during an OpenAI demonstration. On May 23rd, shortly after OpenAI announced the io product—bearing a name closely resembling that of Iyo—Rugolo conveyed his concerns to Altman, stating, “I’m getting blown up on the names situation. I wanted to level with you here, I’m feeling a little vulnerable and exposed, David and Goliath style. I just wanted to hear from you directly, are you serious and optimistic about potentially bringing us in?”
In the same email thread, Peter Welinder, OpenAI’s VP of product, expressed skepticism about a collaboration, noting that “Their device [Iyo’s] is very orthogonal to ours and doesn’t really work yet.”
By June 22nd, OpenAI had removed all references to the “io” branding from its website, later attributing the action to a temporary restraining order issued in response to Iyo’s trademark lawsuit filed on June 9th. Testimony from OpenAI’s hardware team confirmed that the io device is neither an in-ear product nor a wearable.
In its lawsuit, Iyo claims that OpenAI was aware of its technology prior to the io launch, noting meetings with Altman’s investment firm and Jony Ive’s design company in 2022. Iyo alleges it shared information regarding its device while attempting to recruit former Apple designer Evans Hankey, who subsequently co-founded io.
In a subsequent post on X, Altman remarked, “Jason Rugolo had been hoping we would invest in or acquire his company iyo and was quite persistent in his efforts. We passed and were clear along the way. Now he is suing OpenAI over the name. This is silly, disappointing and wrong.”
Altman’s approach mirrors OpenAI’s legal strategy during previous disputes, such as one with Elon Musk, where the company has publicized email communications to present its position. Musk has similarly utilized court documents to his advantage.
Rugolo responded to Altman’s comments on X, expressing his preference to avoid public confrontations. He stated, “Honestly, just think it’s super bad form for someone like you to be coming after me like this. I’m looking forward to competing with you fairly on product; you just can’t use our name.” In another reply, Rugolo elaborated on his prior interactions with Altman before the 2025 emails.
Rugolo lamented in his comments, “When an investor you pitched everything to, especially such a powerful one, tells you they are now doing something competitive… it’s just a terrible feeling. The moment he said he had decided to do something competitive, I should have immediately gotten wise… I got played pretty hard, gave them everything.”
Despite the current branding issues, OpenAI has affirmed that its partnership with Jony Ive is still in effect. The company has also requested the court to dismiss Iyo’s lawsuit, labeling the claims as “unfounded” and “premature.”
