OpenAI is reportedly moving beyond software into the highly competitive smartphone hardware space, with plans to develop custom chipsets in collaboration with Qualcomm and MediaTek. The effort is focused on building a new class of ‘AI-first’ smartphones designed around intelligent agents rather than traditional app-based usage, reports TF Securities International analyst Ming-Chi Kuo. The project is still in its early stages, but timelines suggest that chip design could be finalized by 2026-2027, with mass production targeted around 2028.
At the center of this initiative is the idea of integrating AI directly into the smartphone experience. Instead of relying heavily on cloud processing and standalone applications, smartphones equipped with these potential AI-focused chips are expected to run advanced AI agents locally using specialized on-device hardware. These agents would be capable of executing multi-step tasks – like booking travel, sending messages, managing schedules, or making purchases – based on simple user instructions.
The custom chips being developed are likely to include dedicated neural processing units (NPUs) optimized for on-device AI workloads. This is significant because modern generative AI models are computationally intensive and traditionally rely on data centers powered by GPUs. Therefore, by moving inference capabilities onto smartphones, the ChatGPT maker and its partners aim to reduce latency, improve privacy, and allow continuous real-time AI interactions without constant internet dependence. Qualcomm’s experience with Snapdragon processors and MediaTek’s strengths in power-efficient chip design make them critical collaborators in achieving this balance between performance and battery life.
Another key element emerging from the supply-chain details is the role of Luxshare Precision, which is expected to act as the exclusive system co-design and manufacturing partner for this project. Notably, Luxshare has rapidly grown into a major player in electronics manufacturing, known for assembling high-end consumer devices and competing with traditional giants like Foxconn. Its involvement indicates a tightly controlled production strategy where hardware design, component integration, and manufacturing are aligned from the early stages.
This is not the first time the Sam Altman-led firm has signaled its interest in hardware. It has been working on developing its own custom AI chips, reportedly in collaboration with manufacturing partners like TSMC, to reduce dependence on companies like Nvidia and to better customized hardware for its models. Along with this, OpenAI has secured large-scale infrastructure partnerships with firms like AMD and Broadcom to expand its computing power for training and running AI systems. Meanwhile, on the consumer front, OpenAI has also moved into product design by bringing in former Apple designer Jony Ive and his team, with plans to create new AI-focused hardware products, possibly including compact and wearable formats.
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Ashutosh is a Senior Writer at The Tech Portal, largely reporting on new tech, and intersection of technology and business. Ashutosh’s career spans across nearly a decade of technology writing across multiple platforms and languages.
