OpenAI's next product is a companion. Its own research says that's the problem

**Rachel Varghese** (0:01)
Last week, a Bloomberg report revealed the details of OpenAI's first ever hardware product. Sometime next year, the company is going to sell you an AI companion that interacts with you in a human-like way and lives in your home. It's reportedly a portable speaker with no screen, but it does have some movable parts that don't do anything specific yet except to make you feel like the device is alive. It is also designed to have access to as much of you as possible and understand you more deeply over time and connect with you better.
And Sam Altman has big plans for this device. It is currently being designed by Johnny Ive, who used to be the Chief Design Officer at Apple. And when Altman had acquired Ive's AI hardware design startup called IO in mid-2025, Wall Street Journal reported that he had announced to his OpenAI staff that he plans to ship 100 million AI companions with the aim that they would become a part of users' everyday life. But OpenAI isn't exactly the first company trying to sell users an intelligent companion recently. About a month ago, Meta launched its own line of AI glasses, this time integrated with its new AI model called MuSpark. And one of the additions in this line, called the Starfire Kylie, was designed in collaboration with Kylie Jenner, who you might know as the Kardashian family entrepreneur and model. This particular style comes with an additional perk for an extra $100.
The AI voice on this addition alone sounds like Jenner herself. The irony is that just two years ago, OpenAI itself had published a system card for its popular GPT-4O model. A system card, by the way, is basically a research report that covers the safety concerns that come up during the testing phase. The report showed that users who use a voice mode of the AI model, risk getting unhealthily attached to it. The researchers wrote, and I'm quoting here, that users might form social relationships with AI reducing their need for human interaction, potentially benefiting lonely individuals, but possibly affecting healthy relationships. So the industry is more than aware of the downside of introducing AI companions to the market. But OpenAI is readying for an IPO. It has spent $6.5 billion just in acquiring IO. And Altman has said that the acquisition will add $1 trillion in value to the company. Meta, on the other hand, has burned more than $80 billion on its reality labs. The same arm that has been working on the Meta Ray-Bans and Oakleys, with the glasses being the division's only popular product. It's already in discussions to increase production capacity by the end of this year.
Which means both companies are betting that attachment will save their bottom line, despite the documented risk.
Welcome to Daybreak, a business podcast from The Ken. I'm your host, Rachel Varghese, and every day of the week, my co-host, Snigdha Sharma and I will bring you one new story that is worth understanding and worth your time. Today is Wednesday, the 22nd of July.
The use of the word companion feels like a very deliberate turn from the assistant model that was popular just a few years ago, like Alexa or Siri.
Altman himself referred to the new devices as companions, not assistants. Zuckerberg also made headlines last year in a conversation with podcaster Dwarakesh Patel. Here is how the time put Zuckerberg's argument, and I'm quoting here. He pointed out that the average American has fewer than three friends, and argued that the answer may not be in traditional policy solutions like re-investing in community centers or expanding mental health support. I think people are going to want a system that knows them well and understands them in the way that their field algorithms do. He continued, envisioning AI friends, companions, and therapists as the remedy for modern disconnection. Notice how Zuckerberg is also avoiding the word assistant. Friends, companions, therapists. This shift in vocabulary seems to be mirroring a larger change in what's happening in the way that people use AI. These words describe things that are there for you, not just the things that do things for you. For example, a research project by Mass General Brigham, a nonprofit that runs two US academic medical centers, reported that 87 percent of daily users use chatbots for personal reasons, which could include recommendations, advice or emotional support.
This turn towards the use of companions makes more sense when you know what happened to the assistant era of devices. Alexa is probably the cautionary tale when it comes to AI assistance. A WSJ report two years ago revealed that despite Alexa being in millions of households, Amazon had lost $25 billion in its devices business.