According to a report by Ming-Chi Kuo, a well-known analyst from TF International Securities, OpenAI is partnering with Qualcomm and MediaTek to develop a smartphone chip. Luxshare will be responsible for the system’s co-design and manufacturing, as revealed in his post on X last Monday. The production of this chip is anticipated to begin in 2028, with its specifications and suppliers expected to be finalized by late 2026 or early 2027.
As of now, none of the involved companies have confirmed these claims, and OpenAI has not responded to inquiries from Decrypt. Despite the lack of confirmation, Qualcomm’s stock jumped as much as 12% intraday following Kuo’s announcement, although this increase slightly diminished in subsequent hours.
Kuo describes a device that aims to eliminate traditional apps entirely, opting instead for an AI agent capable of performing tasks directly. He emphasized that controlling both the operating system and hardware is essential for OpenAI to offer a comprehensive AI service. The chip would utilize a combination of on-device and cloud processing while tracking user context in real time.
Historically, standalone AI-focused hardware has faced significant challenges. For instance, the Humane AI Pin was discontinued, and the Rabbit R1 received poor reviews. Moreover, there is little evidence that users are willing to switch from their current phones to a device specifically designed for AI applications.
The timing of this development raises questions, especially considering recent statements by OpenAI’s former chief of applications, Fidji Simo. In March, The Wall Street Journal reported that Simo urged employees at an all-hands meeting to cease distractions and focus efforts. This shift in strategy included shutting down the consumer app Sora for video generation and dissolving the OpenAI for Science division. Notably, Kevin Weil and Bill Peebles of Sora departed from the company on April 17.
Launching a multi-year, multi-billion-dollar smartphone project seems contrary to this focus reset.
Separately, OpenAI has another hardware initiative that began after acquiring Jonny Ive’s io startup for $6.4 billion in May 2025, with products expected by late 2026. This device is internally described as a wearable rather than a phone and remains unannounced.
The rationale behind this strategy mirrors Apple’s approach of designing its own silicon to optimize performance beyond what Android competitors offer. An OpenAI chip tailored for ChatGPT inference could eliminate compromises inherent in general-purpose Snapdragon chips, bypassing Apple and Google’s control over system-level AI features.
Qualcomm is set to report Q2 earnings on Wednesday, with analysts predicting revenue around $10.56 billion. This rumored collaboration with OpenAI might influence Qualcomm’s market valuation.