Key Takeaways A report from the Digital Privacy Alliance highlights the growing granularity of on-device AI data collection in smartphones released in late 2025 and early 2026. Continuous, ambient data collection — enabled by dedicated Neural Processing Units — allows detailed user profiling that often occurs without explicit consent, intensifying the privacy debate. Regulatory pressure is mounting, with the EU AI Act entering full enforcement on August 2, 2026, while US state laws are expanding definitions of sensitive data to include “neural data” generated by AI inference. Your smartphone may never upload a single byte to the cloud — and still know more about you than most people in your life. A new report from the Digital Privacy Alliance reveals just how much the latest generation of AI-equipped smartphones can infer about users through continuous, on-device processing alone: activity patterns, behavioral biometrics, emotional states, and more.…