Analyst Ming-Chi Kuo reports that OpenAI is designing a dedicated smartphone processor in collaboration with MediaTek and Qualcomm, with Luxshare serving as exclusive system co-design and manufacturing partner. The chip is designed around always-on local AI inference — handling memory hierarchy, contextual user-state capture, and small-model execution on-device — rather than app-centric processor designs inherited from today's smartphones. Chip specifications are expected to be finalized by late 2026 or Q1 2027, with mass production targeting 2028; the hardware push builds on OpenAI's $6.5B acquisition of io Products and Jony Ive's ongoing design work.