OpenAI is developing a smartphone with a custom AI chip co-developed by Qualcomm and MediaTek, with Luxshare as exclusive co-designer and manufacturer, analyst Ming-Chi Kuo has reported.

The device would replace traditional apps with AI agents that handle tasks continuously, requiring full control of hardware and operating system. Sam Altman posted it is "a good time to seriously rethink the design of operating systems."

Kuo projects 300-400 million annual shipments if the device succeeds, a volume that would exceed iPhone sales. Mass production is targeted for 2028, with specs finalised by late 2026 or early 2027.

OpenAI's global affairs chief Chris Lehane confirmed a first hardware announcement in the second half of 2026, though earlier reports pointed to earbuds.

Qualcomm's stock surged 12 per cent on the announcement. Neither OpenAI nor the chip partners have officially confirmed the project.

The project signals a deeper hardware bet from OpenAI. With Apple and Google controlling what AI agents can do on their platforms, building a phone removes the ceiling on agent capabilities.

If Kuo's shipment projections hold, an agentic phone category could reorder the smartphone industry the way the original iPhone did. For now, no company has officially confirmed the device.