OpenAI is building a smartphone. Supply chain analyst Ming-Chi Kuo reports the company has tapped MediaTek and Qualcomm for chips and Luxshare Precision Industry for manufacturing, with mass production targeted for 2028. Sam Altman all but confirmed the direction, posting that it "feels like a good time to seriously rethink how operating systems and user interfaces are designed."
This is a sharp reversal from what we've been hearing for over a year. Previous reports consistently pointed to non-phone hardware developed with Jony Ive, whose startup io Products OpenAI acquired for $6.5 billion. The Ive collaboration was supposed to yield a smart speaker first, then glasses and other devices, with an announcement expected in the second half of 2026. Now OpenAI appears to be running two hardware tracks: the Ive devices as niche entry points, and a full smartphone that takes direct aim at the iPhone.
Kuo's argument for why a phone makes sense is straightforward. Phones capture your location, activity, communications, and environment in real time. That context is the raw material AI agents need to actually be useful. He also thinks controlling both hardware and OS is essential for delivering agent experiences that go beyond launching individual apps. A subscription-bundled model could help build a developer ecosystem around those agents.
Whether consumers will bite is another matter. The smartphone market is saturated, and the history of tech companies launching phones is a graveyard. Facebook Phone. Amazon Fire Phone. Commenters on Hacker News are already skeptical, questioning what this solves for users versus what it solves for OpenAI's business ambitions. But if AI agents really do replace apps as the primary way we interact with devices, the company that controls the operating system has an enormous advantage. That's the bet.