Toy giant Mattel announced Thursday it will team up with artificial intelligence giant OpenAI to create the first AI-powered products from a major toy company, marking OpenAI's expansion beyond enterprise software into consumer entertainment. The collaboration will use OpenAI's technology to develop new products for Mattel's brands, with the companies' first AI-powered product expected to be announced later this year, as per an OpenAI statement. The deal also includes deploying ChatGPT Enterprise across Mattel's business operations to enhance product development and creative processes. It comes as AI continues to expand into consumer products, and could shape how children interact with toys in the future. It also positions OpenAI to tap into Mattel's growing entertainment empire, which includes upcoming films based on Hot Wheels, Polly Pocket, and other franchises. Decrypt has approached Mattel for further comment and will update this story if the company responds. The technology could result in digital assistants based on Mattel characters or make traditional games like Magic 8 Ball and Uno more interactive, according to a Bloomberg interview with executives from both companies. "Each of our products and experiences is designed to inspire fans, entertain audiences, and enrich lives through play," Josh Silverman, Mattel's chief franchise officer, said in a statement. "AI has the power to expand on that mission and broaden the reach of our brands in new and exciting ways." Silverman described the first product as spanning "across the spectrum of physical products and some experiences" but did not provide any specifics.  An AI on child safety Safety and privacy concerns are significant to the deal, given Mattel's young customer base.  "As a central part of this collaboration, Mattel and OpenAI will emphasize safety, privacy, and security in the products and experiences that come to market," Mattel said in a statement, noting the importance of age-appropriate play experiences. Mattel retains full control over its intellectual property and product development, with Silverman noting the company is not licensing its brands to OpenAI. Initial discussions between the companies began late last year. "With OpenAI, Mattel has access to an advanced set of AI capabilities alongside new tools to enable productivity, creativity, and company-wide transformation at scale,” said Brad Lightcap, OpenAI's chief operating officer. The announcement comes as OpenAI continues expanding across industries.  OpenAI has also struck big league partnerships with Microsoft for cloud computing services and Apple for integrating ChatGPT into iOS devices, while also securing content licensing deals with major news publishers, including The Associated Press. The company dominated last month, with ChatGPT handling 80% of all generative AI traffic, resulting in 5.5 billion visits, significantly outperforming other AI models. Edited by Sebastian Sinclair