Mattel partners with OpenAI to develop AI-powered toys and experiences

EL SEGUNDO, Calif. - Toy manufacturer Mattel, Inc. (NASDAQ:MAT), a $6.2 billion company with strong financial health according to InvestingPro metrics, has formed a strategic collaboration with artificial intelligence company OpenAI to develop AI-powered products based on Mattel’s brand portfolio, according to a press release statement.

The partnership aims to combine Mattel’s toy expertise with OpenAI’s technology to create new play experiences. The first product resulting from this collaboration is expected to be announced later this year.

As part of the agreement, Mattel will also implement OpenAI’s ChatGPT Enterprise tools within its business operations to enhance product development processes and creative ideation.

"AI has the power to expand on that mission and broaden the reach of our brands in new and exciting ways," said Josh Silverman, Chief Franchise Officer at Mattel.

Brad Lightcap, Chief Operating Officer at OpenAI, noted that Mattel will use the company’s AI capabilities to "introduce thoughtful AI-powered experiences and products into its iconic brands."

The companies emphasized that safety, privacy, and security will be central to their joint product development efforts. Mattel stated that all experiences will be age-appropriate, building on the company’s 80-year history of "earned trust from parents and families."

Mattel’s brand portfolio includes Barbie, Hot Wheels, Fisher-Price, American Girl, and UNO, among others. The company has not specified which brands will be featured in the upcoming AI-powered products.

In other recent news, Mattel Inc. reported impressive financial results, with both revenue and profit margins surpassing expectations, as noted by UBS analyst Arpine Kocharyan. The analyst maintained a Buy rating and a $29 price target, highlighting a positive trend in retail sales. Similarly, Citi analysts raised Mattel’s stock price target from $19.00 to $22.00, maintaining a Buy rating due to the company’s strong first-quarter performance and promising future prospects. Wolfe Research also reaffirmed its Outperform rating on Mattel, citing the company’s strategic manufacturing diversity as a potential driver for market share gains amidst industry challenges.

Additionally, Mattel has launched a new mobile game in collaboration with Uken Games, titled "Mattel Match: Toybox Unlocked," featuring popular brands like Barbie and Hot Wheels. This digital initiative is part of Mattel’s 80th-anniversary celebration, aiming to engage fans through innovative gaming experiences. In product developments, Mattel introduced the Hot Wheels Speed Snap Track System, designed to simplify track assembly and enhance play, set for release in June. This new system addresses consumer feedback on usability and aims to improve the overall play experience for children and parents alike.

Despite macroeconomic uncertainties, Mattel has expressed confidence in its ability to mitigate the impact of tariffs anticipated in 2025. The company plans to neutralize potential costs through strategic actions, as indicated by both UBS and Citi analysts. These recent developments reflect Mattel’s ongoing efforts to strengthen its market position and adapt to changing economic conditions.

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