Renowned analyst Ming-Chi Kuo reports that OpenAI is partnering with MediaTek and Qualcomm on custom smartphone processors, with Luxshare as the exclusive system co-design and manufacturing partner.
Mass production is targeted for 2028.
The concept: an AI Agent-first phone that ditches traditional app grids in favor of a task-oriented interface — where users simply tell the device what they need done, powered by deeply integrated on-device + cloud AI. Kuo shared a concept design (above)comparing it to today’s iPhone home screen.
• Latest industry checks: OpenAI is working with MediaTek and Qualcomm to develop smartphone processors, with Luxshare as the exclusive system co-design and manufacturing partner. Mass production is expected in 2028.
• AI Agent redefines the smartphone: Users are not trying to use a pile of apps. They are trying to get tasks done and fulfill needs through the phone. This fundamentally changes how people think about smartphones. I made a smartphone interface concept design, shown [above], for comparison with today’s model, using the iPhone as an example.
• Why would OpenAI make a phone?
1. Only by fully controlling both the operating system and hardware can OpenAI deliver a comprehensive AI agent service.
2. 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.
3. Smartphones will remain the largest-scale device category for the foreseeable future.
• Tightly integrated cloud and on-device AI:
1. The phone needs to continuously understand the user’s context. Power consumption, memory hierarchy management, and basic small-model execution will be key processor design considerations.
2. More complex or compute-intensive tasks will be handled by cloud AI.
• OpenAI’s advantages lie in its consumer brand, years of accumulated user data, and leading AI models. 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.
• MediaTek and Qualcomm are processor co-development partners and could benefit from long-term replacement demand:
1. Specifications and suppliers are expected to be finalized by late 2026 or 1Q27.
2. 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.
• No matter how hard Luxshare tries, it will be difficult for the company to surpass Hon Hai’s assembly position in Apple’s 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.
MacDailyNews Take: This highlights why Tim Cook had to go. He blindly missed AI and stumbled around for far too long trying to get Apple’s catch up effort moving. After 15 years of iterating on Steve Jobs’ innovations, Apple now, more than ever, needs to be nimble and future-focused in order to stay ahead of hungry rivals.
That said, there’s till plenty of time.
Apple has been integrating Apple Intelligence across iOS, with on-device and Private Cloud Compute smarts, Siri enhancements (with a real LLM Siri revolution coming very soon), and seamless task completion for years now — and they control the entire stack from silicon to software. OpenAI, meanwhile, is still mostly a software/cloud company scrambling to bolt hardware ambitions onto someone else’s silicon and manufacturing.
By the time this thing supposedly ships in 2028, Apple will have LLM Siri in users’ hands and be multiple generations into its own AI-optimized chips, with a mature, privacy-focused ecosystem that hundreds of millions of people already trust and use every day. “Just talk to the AI” sounds revolutionary until you realize that’s exactly where Apple and the Android knockoff peddlers have been heading — except with vastly more mature platforms, developer support, and, in Apple’s case especially, real privacy guardrails.
We’ve seen this movie before: plucky challenger promises to kill the iPhone with a radical new interface. he reality is usually far messier, with fragmented experiences, battery life disasters, app ecosystem problems, and users who ultimately just want something that works reliably.
OpenAI building a phone isn’t impossible — but betting against Apple’s ability to execute on its own AI vision while leveraging its unparalleled hardware/software/integration advantage is a sucker’s bet.
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OpenAI is bleeding money, hand over fist. This move is just a way to try and convince investors to stay on board
Jony Ive is a traitor! Steve would be disgusted