Deutsche Telekom and Perplexity announce new ‘AI Phone’ priced at under $1K

It was inevitable that this year at MWC in Barcelona, at least one carrier would announce a major effort at building a smartphone with a top AI company. And here it is: Deutsche Telekom (DT), said that it is building an "AI Phone," a low-cost handset created in close collaboration with Perplexity, along with Picsart and others, plus a new AI assistant app it's calling "Magenta AI."

DT will unveil the device in the second half of this year, and it will start selling it in 2026 for a price tag of less than $1,000. Initially, it will be aimed at the European market, a spokesperson told TechCrunch.

"We are becoming an AI company," Claudia Nemat, a DT board member who oversees tech and innovation at the telecom, said during a press conference Monday. It's not building foundational large language models, she was quick to add, "but we do the AI agents." 

Notably, Perplexity — the startup out of Silicon Valley that is reportedly now valued at about $9 billion — is being touted as playing a key role in the development of the phone. That is a signal of how the startup, best known today for its generative AI search engine, is taking steps to create more "proactive" products.

"Perplexity is transitioning from just being an answer machine to an action machine," Aravind Srinivas, Perplexity's co-founder and CEO, said onstage at the event. "It is going to start doing things for you, not just answering questions. It's going to be able to book flights for you, book reservations for you, send emails for you, send messages, place phone calls for you, and all those sorts of things, like set smart reminders."

Although this appears to be the first time that Perplexity has inked a deal with a carrier to develop an AI interface for a smartphone, it has a little experience in assistants already: Perplexity launched an Android assistant in January that seems like it could be a likely template for this new "AI Phone."

The news is the latest development in a familiar story from the world of telecoms. For years, carriers — both mobile and fixed — have pined for ways to compete better with technology companies.

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