OpenAI is reportedly working on an AI smartphone to compete with the iPhone
According to the supply chain analyst Ming Chi Kuo OpenAI is working on a smartphone, a significant reversal of earlier reports that the company had no plans to enter the hardware market. According to these reports, MediaTek and Qualcomm are the chip partners, and Luxshare Precision Industry is the exclusive manufacturing partner. Mass production is planned for 2028. The exact chip specifications and further suppliers are expected to be finalized by the end of 2026 or in the first quarter of 2027.
Kuo argues that smartphones, due to their unique position, remain ideally suited for the deployment of AI agents to capture a user’s entire real-time state—including location, activity, communication, and context. He describes this as the most important input for real-time inference by AI agents. He claims that AI agents will fundamentally change how people interact with smartphones by shifting the focus from launching individual apps to completing tasks through a more continuous, context-aware interface.
According to Kuo, complete control over both the operating system and the hardware is the only way for the company to offer a comprehensive AI agent service, and that a subscription-based business model could enable OpenAI to build a developer ecosystem around these agents.
Luxshare has reportedly been waiting a long time to reduce its dependence on the supply chain of Apple, and could benefit significantly from an early entry into what he calls the next generation of smartphone hardware.
OpenAI had no plans for smartphones
This development represents a remarkable reversal in the company’s previous hardware strategy. Earlier reports consistently described its hardware ambitions as focused on devices other than smartphones, developed in collaboration with Jony Ive, Apple’s former design chief.
Ives’ startup io Products was acquired by OpenAI for $6.5 billion. These plans include a smart speaker, which is expected to be the first product to hit the market, as well as smart glasses, a smart lamp, and possibly earphones. Chris Lehane, Chief Global Affairs Officer of OpenAI, stated that the first hardware announcement is expected in the second half of 2026, with the market launch likely in early 2027.
CEO Sam Altman posted on X on the same day Kuo published his analysis, writing that it was “a good time to seriously rethink the design of operating systems and user interfaces.” Such a device would obviously put OpenAI in direct competition with Apple’s iPhone.
