Report: OpenAI is Working on AI Phone With Qualcomm and MediaTek

It’s been almost a year since OpenAI acquired Jony Ive’s AI device startup for 6.4 billion, and the company reportedly has multiple hardware products in the pipeline. Multiple publications reported earlier this year that the AI startup may be working on earbuds, but the ChatGPT maker may also try to redefine the smartphone with the help of AI agents.

Industry analyst Ming-Chi Kuo is reporting today that OpenAI is working with Qualcomm, MediaTek, and Luxshare on its first smartphone that may enter mass production in 2028. The device is expected to rely on AI agents instead of apps to accomplish tasks, which would allow OpenAI to avoid the app gap problem that Microsoft encountered with Windows Phone.

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— 郭明錤｜Ming-Chi Kuo (@mingchikuo) April 27, 2026

According to the report, OpenAI’s first phone will tightly integrate cloud and on-device AI to perform basic tasks locally, while more complex requests will rely on cloud-based AI models. Designing its custom chips may help OpenAI to optimize power consumption when running tasks with lightweight local AI models. For everything else, the company already has some of the most capable AI models on the market, even though a company like DeepSeek offers similar performance at a fraction of the cost of the latest GPT models.

“OpenAI’s advantages lie in its consumer brand, years of accumulated user data, and leading AI models,” the analyst explained. “Smartphone hardware is already highly mature, so OpenAI can work with the supply chain to develop the device. On the business model side, OpenAI may bundle subscriptions with hardware and build a new AI agent ecosystem with developers.”

It’s true that with over 900 million weekly active ChatGPT users, OpenAI does have a mindshare advantage that could help the company capture a part of the smartphone market. However, it would certainly be hard to erase almost two decades of established user habits. An entire generation of smartphone users grew up with apps and app stores, and it’s been proven time and time again that AI models can “hallucinate” and make mistakes.

It’s easy here to remember the famous quote from Alan Kay: “People who are really serious about software should make their own hardware.” However, it remains to be seen if OpenAI, which has yet to find a sustainable business model after raising massive amounts of money, can really pursue another expensive “side quest” after recently shutting down its Sora video generation app.