OpenAI is working on an AI smartphone: MediaTek and Qualcomm on chips, Luxshare on assembly

OpenAI appears to be preparing to move beyond software and cloud services: the company has started developing its own AI smartphone and has already brought MediaTek, Qualcomm and China's Luxshare into the project. If plans do not change, mass production of the device will begin in 2028.

The main bet is not simply another phone with a chatbot, but a hardware platform capable of efficiently running compact AI models directly on the device, without constant dependence on the cloud. Under the current setup, MediaTek and Qualcomm will take part in developing the mobile processor, while Luxshare will handle assembly.

For OpenAI, this is a logical path: instead of building the entire supply chain from scratch, the company relies on manufacturers that already know how to make mass-market mobile chips and produce complex electronics in large volumes. In the smartphone industry, such partnerships usually speed up development, reduce technological risk and prepare the ground early for scaling production. This matters especially for a new device category, where battery life, heat dissipation, AI-block performance and the cost of the final product all have to be solved at once.

The project's key priorities are already set: power efficiency, memory management and local execution of small models. This suggests OpenAI is looking not at maximum "synthetic" performance but at the real user scenario: fast responses, personal features, data processing without noticeable delay and more predictable behavior where the network is weak or expensive.

For a smartphone, this is critical. Even a strong cloud model is of little use if the device drains quickly, overheats or constantly sends requests to a server. That is why local AI in mobile devices is increasingly becoming a core function of the platform rather than an add-on.

The economics of such a device are a separate question. Running compact models locally can reduce the load on cloud infrastructure and lower the cost of individual user operations, especially if AI features are used constantly: for messaging, search, a voice assistant, translation and camera work. In that case the smartphone becomes more than a cloud client; it becomes part of OpenAI's computing architecture. This benefits the user, who gets more features offline, and the company itself, which can balance more precisely between cloud and local scenarios.

Against this backdrop, OpenAI's move looks like an attempt to claim a place not only in apps but in the hardware through which people will interact with AI every day. The market is already moving toward on-device AI: smartphone makers are adding neural units, companies are promoting summarization and text and image generation features, and local processing is becoming an argument both for privacy and for speed.

If OpenAI does release its own device, it will be able to tie together the model stack, the software and the hardware more tightly. It is the same approach that has long worked for large ecosystem players: by controlling the key layers of the product, it is easier to optimize latency, power consumption and the set of user scenarios.

But a real product is still far off. The 2028 target means the project is at an early stage, and OpenAI has a long list of tasks ahead, from chip architecture and supply chain to positioning the device in a crowded market. An AI-focused smartphone will have to be compared not with concepts but with very mature products, where cameras, battery, app ecosystem and servicing are already well refined. Success will therefore depend not only on the model and the chip, but on whether the company can offer a convincing reason for users to switch from their familiar phone.

If the strategy works, OpenAI will stop being merely a model provider and become a contender for its own consumer platform. For the market, it is a signal that the next phase of AI competition will be fought not only over the best answers in a chat interface, but over who controls the device on which those answers appear.