Foxconn Secures OpenAI Hardware Manufacturing After China Exit

Foxconn has taken over full production of OpenAI's first AI hardware device after the project moved away from Chinese manufacturer Luxshare. The shift reflects growing concerns about supply chain security, with manufacturing now headed to Vietnam or the U.S.

⬤ OpenAI switched its first consumer AI device — codenamed "Gumdrop" — from China-based Luxshare to Foxconn due to geopolitical tensions and supply chain concerns. Production will move to either Vietnam or the United States instead of China.

⬤ The device is believed to be a smart pen or wearable AI assistant developed with designer Jony Ive. It's designed for natural AI conversations rather than replacing smartphones, though OpenAI hasn't revealed full specifications yet.

⬤ Foxconn already builds massive cloud computing systems for major tech companies. Adding OpenAI's consumer hardware expands their role from just cloud infrastructure to consumer AI devices — a major strategic win. Luxshare is completely out of the project.

Foxconn Plans $1-5B US Expansion to Double AI Server Output by 2026

Foxconn is planning a massive US expansion worth up to $5 billion as AI server demand explodes. The Taiwan-based manufacturer expects to double its weekly production to 2,000 server racks by 2026 to keep up with orders from Nvidia and OpenAI.

⬤ This move follows a wider pattern of U.S. tech companies pulling production out of mainland China, especially for AI and security-sensitive products. For OpenAI, it's another step beyond software into hardware that could change how people use AI assistants daily.

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Peter Smith - web3.0 projects expert and writer exploring the intersection of blockchain, AI, and online entertainment.