OpenAI plans AI-first smartphone with MediaTek and Qualcomm for 2028 launch

OpenAI is developing its own smartphone with a radical AI-first approach, planning to launch mass production by 2028, according to respected Apple analyst Ming-Chi Kuo. The ChatGPT maker has partnered with chip giants MediaTek and Qualcomm for processor development, while Chinese manufacturer Luxshare will handle system design and manufacturing as the exclusive partner.

This represents a major shift from app-based smartphones to what Kuo calls an “AI agent” device. Instead of users juggling multiple apps, the phone would understand context and complete tasks directly through AI assistance. The move puts OpenAI in direct competition with Apple and Google in the smartphone hardware space, betting that AI integration requires complete control over both software and hardware.

The timing makes sense for OpenAI’s broader strategy. Smartphones capture more real-time user data than any other device – from location and activity to conversations and preferences. This constant stream of contextual information is exactly what AI agents need to provide truly useful, personalized assistance. Without hardware control, OpenAI remains dependent on Apple’s iOS and Google’s Android platforms, which limits how deeply its AI can integrate with the user experience.

The technical approach will blend on-device and cloud processing. The phone’s processors will need to continuously analyze user context while managing power consumption and memory efficiently. More demanding AI tasks will still rely on OpenAI’s cloud infrastructure, but basic AI functions will run locally for speed and privacy.

OpenAI brings several advantages to this challenge:

• Strong consumer brand recognition from ChatGPT’s popularity
• Years of user interaction data to train AI models
• Leading AI technology that competitors are still catching up to
• Potential to bundle hardware with AI subscriptions for recurring revenue

The business model could mirror Apple’s approach, combining premium hardware sales with ongoing service subscriptions. OpenAI would also build a developer ecosystem around AI agents, creating new revenue streams beyond the initial device sales.

For the chip partners, this project offers significant long-term potential. Kuo estimates that AI agent smartphone processors could generate revenue equivalent to 30-40 traditional mobile chips per unit. With the global high-end smartphone market shipping 300-400 million devices annually, the replacement cycle could drive major growth for MediaTek and Qualcomm. The companies expect to finalize specifications and suppliers by late 2026 or early 2027.

Luxshare stands to gain the most from this partnership. The Chinese manufacturer has struggled to match Hon Hai’s dominant position in Apple’s supply chain despite years of effort. An exclusive partnership with OpenAI’s smartphone project gives Luxshare a chance to establish itself as a leader in the next generation of mobile devices, potentially transforming its competitive position in the industry.

The 2028 timeline suggests OpenAI is taking a measured approach rather than rushing to market. This allows time for AI technology to mature further while the smartphone supply chain prepares for a fundamentally different type of device. If successful, OpenAI’s AI agent phone could force Apple and Google to rethink their own smartphone strategies, potentially accelerating the industry’s shift toward AI-first mobile computing.