(Reuters) -Mattel ( MAT ) has teamed up with OpenAI to develop toys and games with artificial intelligence, and expects to launch its first AI-powered product later this year, the Barbie-maker said on Thursday.

The company, which also makes Hot Wheels and Uno cards, plans to "bring the magic of AI to age-appropriate play experiences with an emphasis on innovation, privacy, and safety," it said.

The move comes at a time when toy manufacturers are battling muted demand backdrop as consumers rein in spending to brace for the economic fallout of U.S. President Trump's shifting trade policy.

Mattel ( MAT ) will also incorporate OpenAI's advanced AI tools like ChatGPT Enterprise into its business operations to enhance product innovation, the company said.

"With OpenAI, Mattel ( MAT ) has access to an advanced set of AIcapabilities alongside new tools to enable productivity, creativity, and company-wide transformation at scale," said OpenAI operating chief Brad Lightcap.

Over the last year, Mattel ( MAT ) has relied on producing films, TV shows and mobile games based on its products such as Hot Wheels and Barbie to offset a slowdown in its core toy business.

Last month, Mattel ( MAT ) withdrew its annual forecast and said it would raise prices on some products sold domestically in a bid to mitigate higher supply chain costs.