(Reuters) - OpenAI has signed a deal with Apple device assembler, Luxshare, to make a consumer device, the Information reported on Friday, citing people familiar with the matter.

The device is currently a prototype under development and is expected to be pocket-sized and aware of context, designed to work closely with the ChatGPT parent's artificial intelligence models.

Such a gadget could eat into the markets of Apple and other consumer electronics makers by offering an alternative to users for interacting with AI, challenging the dominance of smartphones and traditional hardware.

Luxshare and OpenAI did not immediately respond to Reuters' requests for comment.

OpenAI bought hardware startup io Products, founded by former Apple designer Jony Ive, earlier this year in a $6.5 billion deal, underscoring its push to move beyond software into consumer hardware.

Luxshare, a major assembler of Apple's ( AAPL ) iPhones and AirPods, would bring large-scale manufacturing capabilities to OpenAI's effort.

OpenAI has also approached China-based Goertek, a supplier that assembles AirPods, HomePods and Apple Watches, to provide components, including speaker modules, for its planned devices, the Information report said.

The project marks one of the boldest bets yet by an AI company to build a dedicated device rather than relying solely on smartphones and PCs. The goal is to create an "AI-native" product, hardware designed from the ground up to work with AI models, rather than bolted onto existing platforms.

This, according to analysts, could open new markets and give OpenAI a foothold in consumer electronics, an arena still dominated by Apple, Samsung and Alphabet's Google.