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OpenAI appears to be rethinking its approach to entering the phone business. The company could produce millions of AI-focused phones over the next two years, according to industry insider Ming-Chi Kuo.
In the post on X, Kuo said the company is "fast-tracking" the device, which Kuo referred to as an "AI agent phone." The analyst said the company could begin mass production in the first half of next year and make 30 million phones in 2027 to 2028 if all goes as planned.
Kuo is a Hong Kong-based market analyst for TF International Securities and is known for consistently accurate predictions, especially about Apple products and manufacturing timelines.
A representative for OpenAI did not immediately respond to a request for comment.
(Disclosure: Ziff Davis, CNET's parent company, in 2025 filed a lawsuit against OpenAI, alleging it infringed Ziff Davis copyrights in training and operating its AI systems.)
As CNET reported last month, OpenAI has shifted from reportedly avoiding so-called "side quests" that take away from its main business to diving right into phone-making. The idea is to create a device that uses AI agents instead of apps, enabling people to complete tasks, access information and entertain themselves more easily on their phones.
Even though a CNET survey last fall showed that the vast majority of phone owners aren't enthusiastic about AI features, OpenAI and its collaborators are convinced that AI will eventually replace phone apps. In his post, Kuo said that MediaTek -- a Taiwanese system-on-chip manufacturer -- likely will be the only processor supplier for the OpenAI phone.
Kuo said last month that OpenAI was also partnering with semiconductor company Qualcomm and with Luxshare, which produces chargers, cables, antennas and connectors.
Despite possible consumer hesitancy about AI-powered phones, some of the most popular phones have AI integration, including the Samsung Galaxy S25 Ultra, Google Pixel 10 Pro, Apple iPhone 17 Pro, Honor Magic 7 Pro and Xiaomi 15 Ultra. Grand View Research forecasts the global AI smartphone market to grow from 52.1 million units in 2023 to nearly 1.9 billion by 2030.
OpenAI's phone features
Kuo said one of the key features of OpenAI's first phone will be its image signal processor, which takes in images from a camera sensor for the AI to use. The sensor will have "enhanced" high dynamic range, producing higher-quality images and providing more visual detail for the AI.
Kuo also said the phone will have "dual-NPU architecture for heterogeneous AI compute" -- basically meaning that the device will employ two AI processors to perform different tasks. For example, one might handle image enhancement, while the other handles object detection or language processing.
The device will be powered by a customized version of the Dimensity 9600, a MediaTek chipset designed for high-end AI processing and hard-core gaming. Other chipsets for AI in phones include Qualcomm's Snapdragon 8 Elite Gen 6 and Snapdragon 8 Elite Gen 6 Pro.
Kuo also said the phone software will have strong memory and security aspects.
