Qualcomm shares jumped 12% in premarket trading on Monday following reports of a partnership with OpenAI to develop AI-powered smartphone processing chips, marking a significant move in the advancement of AI hardware ambitions for the AI firm [1]. According to analyst Ming-Chi Kuo of TF International Securities, Qualcomm will collaborate with Taiwanese semiconductor company MediaTek to develop the chip for OpenAI, while Chinese manufacturer Luxshare will co-design and build the device. Mass production is anticipated in 2028 [1].
Despite the recent surge, Qualcomm's stock remains down 13% year-to-date [1]. Kuo emphasized the strategic importance of this partnership, stating, "Only by fully controlling both the operating system and hardware can OpenAI deliver a comprehensive AI agent service. The smartphone is the only device that captures the user's full real-time state, which is the most important input for real-time AI agent inference" [1]. He further noted that smartphones will continue to be the largest-scale device category in the near term, and OpenAI's accumulated user data positions it well to develop a device entirely run by AI [1]. Kuo also suggested that OpenAI may bundle subscriptions with hardware and build a new AI agent ecosystem with developers [1].
The report highlights Qualcomm's expertise in designing chips and wireless technology, notably its Snapdragon processors and modem technology for mobile connectivity [1]. The partnership follows OpenAI's $6.4 billion equity acquisition of Jony Ive's startup io last year, aimed at designing new AI devices expected to be revealed in two years [1]. OpenAI CEO Sam Altman previously stated that the devices being designed with io will differ from traditional smartphones, offering a more serene and personalized user experience [1]. Additionally, it was reported in September that Luxshare signed a deal with OpenAI to produce consumer devices [1].
CONCLUSION
Qualcomm's reported partnership with OpenAI to develop AI-powered smartphone chips has driven a notable 12% surge in its share price, reflecting strong market optimism. The collaboration, involving MediaTek and Luxshare, is seen as a strategic step toward advancing AI hardware, with mass production targeted for 2028. Analysts highlight the potential for OpenAI to reshape the AI device ecosystem through this initiative.