Apple developing AI wearable to challenge OpenAI hardware push

Apple is developing a wearable device powered by artificial intelligence that could launch as early as 2027, according to people familiar with the project, escalating the hardware competition between Cupertino and OpenAI.

The device would mark Apple’s latest attempt to expand beyond traditional product categories while competing directly with OpenAI, which announced plans for its own hardware device by 2026, likely earbuds. The timing suggests Apple views the San Francisco-based AI company as a growing threat to its hardware dominance.

Apple executives have accelerated the wearable project in recent months following OpenAI’s hardware announcement, said two sources who requested anonymity because the project remains confidential. The device would integrate Apple’s AI capabilities with health monitoring and voice interaction features.

“Apple sees this as essential to maintaining their position as consumers start expecting AI in everything,” said one source close to the development team. “They can’t let OpenAI own the next category.”

The wearable would likely compete with products from Meta’s Reality Labs division in Menlo Park, which has invested billions in augmented reality glasses and other experimental devices. Apple’s entry signals the broader technology industry’s shift toward AI-powered hardware beyond smartphones and computers.

Apple declined to comment on the project. The company typically keeps new products under strict secrecy until formal announcements.

The device development comes as Apple faces pressure to demonstrate AI leadership after being perceived as lagging behind competitors. The company’s iPhone sales have plateaued while OpenAI’s ChatGPT has attracted hundreds of millions of users since its 2022 launch.

OpenAI’s recent executive changes, including former sales chief Aliisa Rosenthal joining Acrew Capital as partner, have created talent opportunities for Apple and other Bay Area companies seeking AI expertise.

Apple’s wearable project faces significant technical challenges, particularly battery life and processing power constraints. The company’s Apple Watch team is reportedly collaborating with AI engineers from the Siri division to address these issues.

The device would likely feature voice-activated AI assistance, health tracking capabilities, and integration with Apple’s ecosystem of iPhones, iPads, and Macs. Industry analysts expect the company to price the device above $500, following Apple’s premium pricing strategy.

“Apple has always been about creating new product categories, but now they’re reacting to OpenAI instead of leading,” said Carolina Milanesi, a technology analyst at Creative Strategies in San Jose. “The question is whether they can deliver something meaningfully different.”

The wearable represents Apple’s broader push into AI hardware as the company prepares for a future where artificial intelligence becomes central to consumer devices. Apple has integrated AI features into recent iPhone and Mac updates but hasn’t launched dedicated AI hardware.

Apple’s Cupertino campus houses several teams working on the wearable project, including engineers previously assigned to the now-cancelled car project. The company shut down its automotive division earlier this year to focus resources on AI initiatives.

The 2027 timeline remains tentative and could shift based on technical progress and market conditions. Apple has historically delayed product launches when features don’t meet internal quality standards.

OpenAI’s hardware ambitions have surprised Silicon Valley executives who viewed the company primarily as a software developer. The San Francisco startup’s success with ChatGPT has provided resources and credibility for hardware development.

Both companies face competition from established hardware manufacturers including Samsung, Google, and Amazon, which have integrated AI features into existing product lines. The race reflects growing industry consensus that AI will drive the next generation of consumer devices.

Apple’s stock has gained 12% this year partly on investor optimism about AI integration. The company’s strong balance sheet and manufacturing expertise provide advantages in hardware development compared to software-focused competitors.

The wearable project’s success could determine whether Apple maintains its premium market position as AI reshapes consumer expectations. Failure to deliver a compelling AI device could accelerate market share losses to more aggressive competitors.

Apple plans to provide more details about its AI strategy at its annual developer conference next June, though the wearable device likely won’t be announced until closer to its launch date.