OpenAI is set to enter the smartphone market by 2028, collaborating with MediaTek, Qualcomm, and Luxshare to develop an AI-powered phone. This move comes as OpenAI faces financial pressures, with projections of burning through $115 billion in cash before turning profitable by 2030. The company aims to leverage hardware sales to convert free users of its ChatGPT service into paying customers, bundling subscriptions with the phone to drive revenue. Despite achieving $20 billion in annual recurring revenue in 2025, OpenAI's subscription model faces challenges, with only 5% of ChatGPT users paying for the service. As enterprise revenue and advertising avenues become increasingly competitive, OpenAI views hardware as a potential new revenue stream. The company plans to go public by late 2026, targeting a $1 trillion valuation, but must first demonstrate sustainable growth beyond its current offerings.