Top News

OpenAI is quietly moving closer to entering the smartphone market, with fresh analyst insights suggesting its first AI-focused phone could hit mass production as early as the first half of 2027. The report, attributed to noted Apple analyst Ming-Chi Kuo, points to an aggressive timeline as competition in AI-driven devices begins to heat up.

At the heart of the device could be a custom processor built by MediaTek. The chip is expected to be based on a modified version of the Dimensity 9600 and manufactured using TSMC’s advanced N2P process, likely entering production in the second half of 2026. While details are still emerging, the phone’s camera processing system, or ISP, is tipped to be a standout feature, with a focus on improved HDR performance to better interpret real-world visuals - an important requirement for AI-powered interactions.

The hardware is being designed with AI at its core. A dual neural processing unit setup is expected to handle different layers of AI tasks, while next-gen memory and storage standards like LPDDR6 and UFS 5.0 aim to prevent performance bottlenecks. On the security side, features such as pKVM-based virtualisation and inline hashing could help safeguard sensitive data in an always-on AI environment.

OpenAI’s broader vision appears to go beyond just another smartphone. The company is betting on what analysts call an “AI agent phone”- a device that shifts away from app-centric usage to task-based interactions. Instead of juggling multiple apps, users would rely on an AI system that understands context and completes actions in real time.

To make that possible, tight integration between on-device processing and cloud computing will be critical. Basic, continuous tasks -like understanding user behaviour or environment would run locally on the phone, while heavier AI workloads would be handled in the cloud.

The project is also expected to involve multiple industry players. Alongside MediaTek, Qualcomm is reportedly collaborating on processor development, while Luxshare is said to be the exclusive partner for system design and manufacturing. Even so, Luxshare may still face stiff competition from established players like Foxconn, which dominates global smartphone assembly.

Why is OpenAI entering hardware now? Analysts suggest three main reasons: full control over hardware and software to optimise AI performance, access to real-time user context through a personal device, and the sheer scale of the global smartphone market, which remains unmatched.

If timelines hold, the company could ship around 30 million units across 2027 and 2028 combined. That would position OpenAI as a serious new contender in the premium smartphone space, especially as AI becomes the next battleground for consumer tech.

There is also a business angle. OpenAI could bundle its AI services into the device, creating a subscription-driven ecosystem similar to how other tech giants lock users into their platforms.

While the plans are still evolving, one thing is clear: OpenAI is not just building a phone. It is attempting to redefine how smartphones work in an AI-first world.