Technology news and discussion on TalkFuse.
Smart speakers could help OpenAI lose even more money
OpenAI is reportedly preparing to launch its first hardware product, a rechargeable "humanlike" smart speaker, according to Bloomberg's Mark Gurman. The move comes despite warnings from former executive Fidji Simo that the company risks being distracted by costly side projects, and analysts note it is entering a smart speaker market that is stagnant or shrinking, raising questions about the strategic wisdom of the venture for a company that is not yet profitable.
Industry data from IDC shows smart speaker shipments have fallen sharply since peaking above 100 million units in 2022, with declines of 16.3% in 2023 and 11.8% in 2024, before a smaller 6.7% drop in 2025 following Amazon's launch of Alexa+; a further 9.6% decline is forecast for this year. Analyst Jitesh Ubrani says consumers have little reason to upgrade existing devices since new features are cloud-based, and warns OpenAI faces stiff competition from established players in a category that has changed little. The reported device will include a camera, sensors and moving mechanical parts, likely pushing its price well above the low-cost norm for speakers, and will run on OpenAI's new GPT-Live-1 voice model, designed for more natural, humanlike conversation.
In short
- OpenAI reportedly building a "humanlike" smart speaker, its first hardware device.
- Smart speaker market is shrinking, per IDC shipment data.
- Analysts doubt OpenAI can easily compete in a stagnant, price-sensitive category.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
OpenAI possesses arguably the world's most advanced conversational AI technology. Whilst the smart speaker market has contracted, this may reflect saturation with inferior products rather than fundamental lack of demand for a genuinely superior alternative. Premium hardware with advanced voice capabilities could justify higher pricing for consumers valuing superior interaction. Hardware also creates crucial daily touchpoints with users and generates valuable data streams. Even in a shrinking market, a technological leader can capture significant share and profitability by targeting the premium segment and establishing direct consumer relationships.
The case against
OpenAI's own unprofitability makes expensive hardware ventures particularly risky. The smart speaker market has contracted consistently since 2022, with further decline forecast, suggesting structural headwinds rather than temporary weakness. Consumers demonstrably lack motivation to upgrade existing devices, creating a ceiling on addressable market regardless of quality improvements. Amazon, Google and Apple have entrenched positions, economies of scale and ability to subsidise devices. OpenAI's premium pricing will further restrict market size. The company's former leadership has explicitly warned against costly distractions from the core business that generated the capital to pursue this venture.
Explained simply
OpenAI, the company behind ChatGPT, is preparing to launch its first piece of hardware, a smart speaker that responds to voice commands with a more natural, humanlike conversation style. Smart speakers are voice-activated devices—like Amazon's Alexa—that sit in people's homes and handle requests such as playing music, answering questions and controlling other devices. This marks a significant shift for OpenAI from its core business of developing artificial intelligence software.
The timing of this move is notable because the global smart speaker market has been shrinking for several years. Industry figures show that shipments of these devices peaked above 100 million units in 2022 but have since fallen significantly, with declines expected to continue. Some analysts question whether entering a declining market makes strategic sense, particularly given the cost of developing and manufacturing physical hardware.
OpenAI is also not yet profitable, meaning it spends more money than it makes, raising questions about the wisdom of investing in an expensive new hardware venture. The proposed device will include features like a camera and moving mechanical parts, suggesting it will cost considerably more than traditional smart speakers, which are typically cheap. It will compete against established companies such as Amazon that already have large market shares and loyal customer bases.