Mattel Inc. (MAT  ) has reportedly entered into a partnership with OpenAI to explore new ways of using artificial intelligence in its toy lines and digital products.

Though the collaboration is still in its early stages, both companies say the first outcome of the partnership will be announced later this year.

Brad Lightcap, OpenAI's chief operating officer, and Josh Silverman, Mattel's chief franchise officer, shared insights into the collaboration during a joint interview with Bloomberg.

Silverman emphasized that while the Barbie maker will use Microsoft Corp-backed (MSFT  ) OpenAI's tools in the development process, the company is not licensing its intellectual property. Mattel will retain full control over any product resulting from the alliance.

The partnership could result in the development of interactive toys and digital experiences that incorporate AI, including the use of well-known Mattel characters as digital assistants or enhanced versions of classic games like Uno or the Magic 8 Ball.

The companies see the potential for AI to increase interactivity and engagement in Mattel's product lineup.

Discussions between Mattel and OpenAI began in late 2024.

The collaboration aligns with Mattel CEO Ynon Kreiz's strategy of transforming the company beyond traditional toys into a broader entertainment entity, focusing on films, TV shows, and mobile games based on its popular brands.

OpenAI, on the other hand, has been actively seeking partnerships with companies that own iconic intellectual property.

Last year, the AI firm held meetings in Los Angeles with Hollywood studios, media executives, and talent agencies to present Sora, its AI video generator capable of producing realistic, one-minute videos from text prompts.

Despite the buzz surrounding Sora, OpenAI has yet to secure formal deals with movie studios.

Lightcap acknowledged that the company still needs to build trust in Hollywood before partnerships can take shape, a point he reiterated at a Wall Street Journal conference in May.

"We plan to announce something towards the tail end of this year, and it's really across the spectrum of physical products and some experiences," Silverman told Bloomberg.

The toymaker posted first-quarter 2025 revenue of $827 million, surpassing analyst estimates of $786 million, and reported an adjusted loss of three cents per share-beating the expected 10-cent loss.

Due to macroeconomic volatility and uncertainty around U.S. tariffs, the company paused its full-year 2025 guidance, noting it will resume once visibility improves.

Mattel plans to accelerate supply chain diversification, optimize product sourcing, and raise prices to counter rising costs.

The company also increased its 2025 cost-saving goal from $60 million to $80 million, reinforcing its focus on efficiency as it navigates a turbulent economic environment.

Price Action: MAT stock is down 0.57% at $19.15 during the premarket session at the last check on Thursday.