OpenAI is reportedly working with chipmakers MediaTek and Qualcomm to develop processors for smartphones. Popular analyst Ming-Chi Kuo recently shared a post on X (formerly known as Twitter), where he said that the project also involves Luxshare as an exclusive partner for system co-design and manufacturing.
Kuo said mass production of the chips is expected to begin in 2028. The move reflects OpenAI’s plans to build a smartphone focused on AI agents. According to the post, users are shifting from using multiple apps to completing tasks directly through AI systems.
Why OpenAI Would Make a Phone
Kuo highlighted three reasons for OpenAI to enter the smartphone market:
- Full control: Only by fully controlling both the operating system and hardware can OpenAI deliver a comprehensive AI agent service.
- Real-time user data: The smartphone is the only device that captures the user’s full real-time state, which is the most important input for real-time AI agent inference.
- Market scale: Smartphones will remain the largest-scale device category for the foreseeable future.
Supply Chain and Timeline
According to Kuo, details such as specifications and suppliers are expected to be finalized by late 2026 or early 2027. The chips could target the high-end smartphone market, which sees annual shipments of around 300 to 400 million units. The project could also benefit companies involved in the supply chain. Luxshare, in particular, may gain from its role in the project.
Kuo said OpenAI may combine hardware with subscription-based services and build a developer ecosystem around AI agents. He added that OpenAI’s existing AI models and user base could support its entry into the smartphone market.
Cloud and On-Device AI Integration
The phone needs to continuously understand the user’s context. Power consumption, memory hierarchy management, and basic small-model execution will be key processor design considerations. More complex or compute-intensive tasks will be handled by cloud AI.
OpenAI’s advantages lie in its consumer brand, years of accumulated user data, and leading AI models. Smartphone hardware is already highly mature, so OpenAI can work with the supply chain to develop the device. On the business model side, OpenAI may bundle subscriptions with hardware and build a new AI agent ecosystem with developers.
Partner Benefits
MediaTek and Qualcomm are processor co-development partners and could benefit from long-term replacement demand. Specifications and suppliers are expected to be finalized by late 2026 or first quarter of 2027. Taking MediaTek × Google TPU Zebrafish as an example, the revenue contribution of a single chip is roughly equivalent to 30–40 AI agent smartphone processors. If the initial target is the global high-end smartphone segment, which ships about 300–400 million units per year, the replacement cycle could become another major growth driver.
No matter how hard Luxshare tries, it will be difficult for the company to surpass Hon Hai’s assembly position in Apple’s supply chain. That makes this project especially meaningful for Luxshare. With an early position in the supply chain, Luxshare could become a leading beneficiary in the next smartphone generation.
