OpenAI is reportedly partnering with Qualcomm and MediaTek to develop smartphone processors. A project which has the potential to redefine the high-end handset market.
TF International Securities analyst Ming-Chi Kuo outlined the collaboration, which includes Luxshare as the exclusive system co-design and manufacturing partner, in a post on X.
Kuo suggests future smartphones could rely on AI agents to complete various tasks instead of apps.
He said specifications and supplier selections are expected to be finalised by late 2026 or the first quarter of 2027, with mass production scheduled for 2028.
“Only by fully controlling both the operating system and hardware can OpenAI deliver a comprehensive AI agent service”, Kuo said in his post.
As to why OpenAI would champion a phone, he explained full OS and hardware control is the only path to seamless AI agent delivery.
“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,” Kuo stated. “Smartphones will remain the largest-scale device category for the foreseeable future”.
In an X post the same day, OpenAI CEO Sam Altman appeared to highlight the partnership by posting: “Feels like a good time to seriously rethink how operating systems and user interfaces are designed”.
He added “also the internet; there should be a protocol that is equally usable by people and agents”.
Kuo argues OpenAI’s competitive edge rests on its consumer brand, accumulated user data and frontier AI models and not hardware manufacturing, which means it could rely on established supply chains to build the device itself.
On the business side, the analyst floated a bundled subscription model as a likely revenue vehicle while also building a new AI agent ecosystem with developers.
“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”, said Kuo.
He explained no matter how hard Luxshare tries, it will be difficult for the company to surpass Foxconn’s assembly position in Apple’s device 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”.
Source: Mobile World Live
Image Credit: Qualcomm
