Qualcomm Surges on News of OpenAI Chip Partnership for Smartphones

Qualcomm shares jumped 12% in premarket trading Monday after reports emerged that the chip designer is teaming up with OpenAI to develop smartphone processors, marking a major step in the AI company’s push into hardware. According to Ming-Chi Kuo, an analyst at TF International Securities, Qualcomm and Taiwanese chipmaker MediaTek will work together on the chip, while Chinese manufacturer Luxshare will co-design and build the final device. Mass production is expected in 2028.

Kuo argued that controlling both the operating system and hardware is essential for OpenAI to deliver a comprehensive AI agent service. “The smartphone is the only device that captures the user’s full real-time state,” he wrote on X, adding that smartphones will remain the largest device category for the foreseeable future. He noted that OpenAI’s years of accumulated user data make it a natural fit to develop an AI-native device, potentially bundling subscriptions with hardware to build a new developer ecosystem.

The move aligns with OpenAI’s broader hardware ambitions. Last year, the company acquired Jony Ive’s startup io for $6.4 billion in equity, with plans to design AI devices expected in two years. OpenAI CEO Sam Altman described those devices as offering a calm, focused experience, unlike the distraction of a typical smartphone. In September, Luxshare also signed a deal with OpenAI to produce consumer devices.

Qualcomm, best known for its Snapdragon processors powering Android phones and 5G modems, has seen its stock drop 13% year-to-date. The company, along with OpenAI and MediaTek, declined to comment on the reports.

Source: CNBC