OpenAI is collaborating with Qualcomm and MediaTek to create an AI agent smartphone, aiming for annual shipments of 300-400 million units by 2028.

      TL;DR: OpenAI is working on a smartphone that uses AI agents instead of traditional apps, with Qualcomm and MediaTek creating a custom processor and Luxshare manufacturing it exclusively, as reported by Ming-Chi Kuo. The analyst anticipates annual shipments of 300-400 million units, aiming for mass production by 2028. Following the news, Qualcomm's stock rose 13%. While the supply chain is credible—Luxshare assembles AirPods and Qualcomm powers a significant portion of the Galaxy S26—OpenAI has no previous experience in hardware, and past AI devices like the Humane Pin and Rabbit R1 have failed. This initiative represents OpenAI's second hardware project alongside its collaboration with Jony Ive.

      OpenAI is creating a smartphone focused on AI agents instead of apps, with Qualcomm and MediaTek working together on the custom processor, while Luxshare Precision Industry handles exclusive manufacturing, according to analyst Ming-Chi Kuo, known for his reliable Apple supply-chain insights. Kuo estimates that, if successful, the device could ship 300 to 400 million units annually, which would surpass Apple's iPhone sales, positioning it against the companies that control approximately 40% of the global smartphone market. The specifications and supplier details are anticipated to be finalized by late 2026 or early 2027, with mass production slated for 2028. On the announcement, Qualcomm's shares jumped by 13% in premarket trading. However, Qualcomm, OpenAI, and MediaTek have not confirmed this partnership. It's important to note that Kuo's insights are speculative reports rather than confirmed announcements, but his described supply chain is well-established and involved in current production.

      The device Kuo envisions is not merely a smartphone equipped with an AI assistant; it fundamentally replaces apps with AI agents as the primary interaction means. Users would engage with these agents to carry out tasks such as ordering transport, making restaurant reservations, managing emails, conducting research, and drafting messages. The architecture would allow lighter tasks to be processed on the device, while more complex computations would utilize cloud resources. Kuo describes that the device would maintain "full real-time state," continually tracking the user’s location, activity, communication, and environmental context for the agents. Qualcomm's CEO Cristiano Amon has emphasized a vision where AI agents supplant the mobile OS and apps, advocating for a hardware design purpose-built for efficient, ongoing AI processing rather than adapting existing chipsets.

      This project is distinct from OpenAI's other collaboration with Jony Ive, who is leading the design of a smart speaker, followed by plans for glasses, a lamp, and earbuds, with the first product expected in early 2027. OpenAI is pursuing two separate hardware approaches: one reimagining the personal computer without a screen, and the other maintaining the smartphone form while transforming its operational framework. Apple is reportedly testing AI smart glasses featuring a custom chip and enhanced capabilities powered by a Gemini model, with a target release in 2027. The ongoing exploration by major tech companies into where AI should reside—be it on smartphones, glasses, or smart speakers—reveals a competitive landscape with diverse strategies. OpenAI seeks to cover all possibilities simultaneously.

      The validity of Kuo's report hinges more on the supply chain than the concept itself. Luxshare Precision Industry serves as a significant supplier for Apple, producing AirPods, components for the Apple Watch, and assembling a growing number of iPhones. Qualcomm's Snapdragon 8 Elite Gen 5 now powers 75% of the Galaxy S26 series and has surpassed Apple in raw multi-core and GPU performance for the first time. MediaTek’s Dimensity 9500 delivers competitive CPU performance with better cost efficiency. These suppliers are not associated with a theoretical phone; they produce devices that are already being shipped in large volumes. Qualcomm's acquisition of Edge Impulse in 2025 highlighted the company's strategic focus on on-device AI processing across multiple device categories. The Snapdragon 8 Elite Gen 5 features 37% faster AI processing than its predecessor, supports AI that adapts to user behavior, and integrates continuous context awareness through an enhanced sensing hub. Qualcomm is also reportedly developing custom 3D DRAM optimized for AI applications in mobile devices. The necessary components for Kuo’s described device are currently available; the challenge lies in whether the proposed software model can succeed.

      The financial context is significant. Prior to the report, Qualcomm's shares traded at $149.84, down from a 52-week peak of $205.95, with earnings growth decreasing by 46.9% and gross margins at 55.1%. The company is set to report earnings on April 29, just two days after Kuo's report. In February, Bloomberg noted that Qualcomm had a “tepid forecast,” indicating a struggling phone market. An OpenAI partnership would bring a new revenue stream for Qualcomm as its traditional business of supplying modems and processors faces competition from Apple's self-suff