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Chinese smartphone maker Oppo in weekly AI talks with Google, Microsoft

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Chinese smartphone company Oppo ranks second in mainland China, and fourth worldwide, according to Canalys.

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BEIJING — Chinese smartphone company Oppo is doubling down on artificial intelligence as it holds weekly talks about AI with senior management at Google and Microsoft in the run-up to the launch of its flagship phone overseas.

The collaborations are part of the race to find the next artificial intelligence application. The rise of generative AI — tech that can produce human-like responses when prompted — has companies from Apple to Honeywell rushing to tap its capabilities.

“Google will also come to China to ask us, what needs and pain points do you have with your products? Let’s solve them together,” Billy Zhang, president of Oppo’s overseas market, sales and services, told reporters last week at the company’s office in the southern Chinese city of Shenzhen. That’s according to a CNBC translation of his Mandarin-language remarks.

“We know consumers’ needs, and we will use AI to satisfy [them],” Zhang said. The company is expanding further in Europe, but does not have immediate plans for the U.S., he said.

Oppo, which owns the OnePlus brand too, said it derives around 60% of its revenue from Southeast Asia, Europe and other overseas markets. The company ranked fourth globally in terms of smartphone shipments in the third quarter, making up 9% of all units shipped, according to Canalys. Samsung and Apple were tied for the first spot, followed by Xiaomi.

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While the U.S. leads in terms of AI capabilities, experts suggest Chinese companies will have an edge when it comes to consumer applications of the tech. That’s despite U.S. restrictions on exports of high-end chips to China.

Oppo has said its forthcoming flagship smartphone will be equipped with AI writing and recording summary tools from Google’s Gemini, and content generation features from Microsoft. Microsoft employs OpenAI products such as ChatGPT.

It was not immediately clear to what extent existing Oppo models use AI tools from the two tech companies. Oppo has yet to announce when its flagship phone will be available globally.

AI smartphones set for growth

Oppo in June announced it plans to integrate generative AI in 50 million of its devices this year. Its existing AI tools allow touching up photos — such as removing window reflections. Oppo also has a ChatGPT-like bot.

In addition to partnerships, Oppo said it has developed its own AI models since 2020 and opened an AI center in February.

“We are very optimistic about AI and have invested with great determination,” Zhang said. “AI is the most important area for tech in the future. All industries can be transformed by AI.”

Counterpoint Research predicts shipments of generative AI smartphones will skyrocket to 732 million in 2028 from 46 million last year, according to a whitepaper published Wednesday. The report did not specify how complex those generative AI features would be.

Apple next week is due to publicly release its first software update with AI tools. A subsequent update will allow removing unwanted elements in photos, and integration with ChatGPT, the iPhone maker said Wednesday.

Chinese smartphone company Honor on Wednesday revealed the next version of its operating system that can use AI to mimic actions on a touchscreen, such as opening an app to order coffee delivery.

Tech for production efficiency

Oppo plans to integrate AI into its factories, which are increasingly automated, Zhang said. “Today, automation improves quality and stability, lowers production costs and increases unit yield.”

At a production line for an entry-level smartphone in Dongguan, near Shenzhen, Oppo has this year replaced about 8% of the workers with machines, and moved those employees to work on more complex, higher-end phones.

Other companies have announced plans to integrate generative AI with the industrial sector. Honeywell this week announced a deal with Google’s Gemini to create AI assistants for factory workers and systems.

Oppo is rolling out its digital management system to its factories in seven other countries, starting with India and Indonesia. The company also produces phones in Turkey, Pakistan, Bangladesh, Brazil and Egypt.

“Since our manufacturing process is largely digitalized and standardized, growing and expanding to global markets is much easier,” Danny Du, director of manufacturing management at Oppo told CNBC.

Oppo has cut its manufacturing costs by nearly 40% over three years, Du said, adding that technological integration with factory machines and systems has cut production time to six days, from 16. He said that allows Oppo to respond more quickly to market orders, instead of relying on longer-term forecasts that come with the risk of unsold inventory.

— CNBC’s Kif Leswing and Eric Rosenbaum contributed to this report.

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Klarna doubles losses in first quarter as IPO remains on hold

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Sebastian Siemiatkowski, CEO of Klarna, speaking at a fintech event in London on Monday, April 4, 2022.

Chris Ratcliffe | Bloomberg via Getty Images

Klarna saw its losses jump in the first quarter as the popular buy now, pay later firm applies the brakes on a hotly anticipated U.S. initial public offering.

The Swedish payments startup said its net loss for the first three months of 2025 totaled $99 million — significantly worse than the $47 million loss it reported a year ago. Klarna said this was due to several one-off costs related to depreciation, share-based payments and restructuring.

Revenues at the firm increased 13% year-over-year to $701 million. Klarna said it now has 100 million active users and 724,00 merchant partners globally.

It comes as Klarna remains in pause mode regarding a highly anticipated U.S. IPO that was at one stage set to value the SoftBank-backed company at over $15 billion.

Klarna put its IPO plans on hold last month due to market turbulence caused by President Donald Trump’s sweeping tariff plans. Online ticketing platform StubHub also put its IPO plans on ice.

Prior to the IPO delay, Klarna had been on a marketing blitz touting itself as an artificial intelligence-powered fintech. The company partnered up with ChatGPT maker OpenAI in 2023. A year later, Klarna used OpenAI technology to create an AI customer service assistant.

Last week, Klarna CEO Sebastian Siemiatkowski said the company was able to shrink its headcount by about 40%, in part due to investments in AI.

Watch CNBC's full interview with Klarna CEO Sebastian Siemiatkowski

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Stocks making the biggest premarket moves: Walmart, Netflix, Tesla, Reddit and more

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UK to regulate buy now, pay later firms like Klarna and Affirm

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Klarna is synonymous with the “buy now, pay later” trend of making a purchase and deferring payment until the end of the month or paying over interest-free monthly installments.

Nikolas Kokovlis | Nurphoto | Getty Images

The U.K. government on Monday laid out proposals to bring short-term loans under formal rules as it looks to clamp down on the “wild west” of the buy now, pay later sector.

Fintech firms like Klarna and Block’s Afterpay have flourished by offering interest-free financing on everything from fashion and gadgets to food deliveries — while at the same time stoking concerns around affordability. The space is highly competitive, with U.S. player Affirm launching in the U.K. just last year.

City Minister Emma Reynolds said in a statement Monday that the U.K.’s new rules were designed to tackle a sense of “wild west” in the buy now, pay later (BNPL) space, adding the measures “will protect shoppers from debt traps and give the sector the certainty it needs to invest, grow, and create jobs.”

Under the U.K. proposals, BNPL firms will be required to make upfront checks to ensure people can repay what they borrow and make it easier for customers to access refunds.

Consumers will also be able to take BNPL complaints to the Financial Ombudsman, a service created by the U.K. Parliament to settle disputes between consumers and financial services firms.

The rules are expected to come into force next year, according to the government.

Klarna said it has long supported calls to bring BNPL into the regulatory fold. “It’s good to see progress on regulation, and we look forward to working with the FCA on rules to protect consumers and encourage innovation,” a spokesperson for the company told CNBC via email.

“Regulation will give clarity and consistency to the sector, establishing a consistent operating environment and compliance standards for all providers,” spokesperson for Clearpay, the U.K. arm of Afterpay, said in an emailed statement.

“It will also create a more sustainable foundation for the future of BNPL as it continues to grow as an everyday payment option for consumers.”

While buy now, pay later firms have publicly expressed support for regulation, many were concerned about regulators applying outdated rules to their business models. The Consumer Credit Act, which regulates lending and borrowing in the U.K., has existed for over 50 years.

For its part, the government said it plans to adapt the Consumer Credit Act to allow for a “modern, pro-growth framework that reflects how people borrow today.”

WATCH: CNBC’s full interview with Affirm CEO Max Levchin

Watch CNBC's full interview with Affirm CEO Max Levchin

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