Qualcomm soars 12% on OpenAI smartphone AI chip partnership

Qualcomm saw a rise in its premarket shares on Monday due to news of its collaboration with OpenAI to develop smartphone processors to boost OpenAI's goals in hardware.

The American smartphone chipset provider plans a collaboration with Taiwanese semiconductor company MediaTek to craft OpenAI's chip, with Chinese manufacturer Luxshare assisting in designing and producing the device, according to Ming-Chi Kuo, an analyst at TF International Securities, shared on X on Monday. Mass production is anticipated to begin in 2028, according to Kuo.

Qualcomm shares rose 12% in premarket trading. However, the stock has fallen by 13% thus far this year.

“For OpenAI to provide a full-fledged AI agent service, controlling both the operating system and hardware is essential,” Kuo mentioned in the post. "Smartphones capture the user’s complete, live status, which is crucial for real-time AI agent analysis."

Kuo noted that smartphones will continue to be the largest device category moving forward, so OpenAI's development of an entirely AI-driven device aligns with the significant user data the company has already gathered.

“With smartphone hardware being well-developed, OpenAI can collaborate with the supply chain to create the device,” Kuo added. 

“On the business front, OpenAI might pair subscriptions with hardware creating a new AI agent ecosystem with developers.”

Qualcomm is known for designing chips and wireless technology for phones and other devices, with its Snapdragon processors powering many Android devices and its modem technology enabling 4G and 5G connectivity.

OpenAI's choice to team up with Qualcomm seems logical for advancing its smartphone agenda, especially after acquiring Apple’s former design chief Jony Ive’s company io for $6.4 billion in stock last year to develop revolutionary AI devices expected within two years.

Altman mentioned last year that these OpenAI devices crafted with io would contrast with typical smartphones. 

The device, he said, will “be aware of everything you've ever thought, read, or spoken,” likening it to experiencing Times Square.

Moreover, it was reported in September that Luxshare entered an agreement with OpenAI to manufacture consumer devices.