Qualcomm shares surged as much as 13% in premarket trading on Monday, before re-tracing those gains, amid reports that OpenAI is working with the chipmaker and Taiwan's MediaTek to develop custom smartphone processors for a new AI-first device.
Industry checks indicate that Chinese manufacturer Luxshare, an existing Apple supplier, will serve as the exclusive system co-design and manufacturing partner for the device, with mass production expected in 2028.
One leading analyst suggested OpenAI may bundle subscriptions with hardware and build a new AI agent ecosystem with developers, rather than competing on traditional smartphone terms with Apple and Samsung, which together hold roughly 40% of the global handset market.
The move extends OpenAI's consumer hardware ambitions, which accelerated last May when the company acquired Jony Ive's startup io Products for $6.5 billion in equity, bringing the former Apple chief design officer in to lead device development.
Chief executive Sam Altman has said the devices OpenAI is designing will be fundamentally different from current smartphones and could "know everything you've ever thought about, read, said."
Luxshare signed a deal with OpenAI to produce consumer devices in September, according to earlier reporting.
Industry experts argue that smartphone hardware is already mature enough for OpenAI to work with established supply chain partners rather than building manufacturing capabilities from scratch, and that both Qualcomm and MediaTek stand to benefit from long-term demand as AI-driven replacement cycles accelerate.
The premarket roller coaster followed an already strong session on Friday, when Qualcomm rose 11% as part of a broader semiconductor rally fuelled by Intel's better-than-expected first-quarter earnings.
Apple shares dipped 1.7% on the news.
The iPhone maker last week named long-time hardware chief John Ternus as chief executive, a signal that devices will remain central to its strategy even as it works to close the gap with rivals on AI features.
The report also adds to evidence that the smartphone is likely to retain its dominant position in the AI era, following news last month that Amazon is planning a fresh push into the handset market.
The recap
- Qualcomm reportedly partnering with OpenAI on smartphone AI chip
- Shares rose intraday, trading up 7% after the opening bell
- Mass production of the device is expected in 2028
