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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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Citadel’s Ken Griffin says Trump’s tariffs could lead to crony capitalism

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Ken Griffin, chief executive officer and founder of Citadel Advisors LLC, speaks during an Economic Club of New York event in New York, US, on Thursday, Nov. 21, 2024.

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Citadel CEO Ken Griffin issued a warning against the steep tariffs President-elect Donald Trump vowed to implement, saying crony capitalism could be a consequence.

“I am gravely concerned that the rise of tariffs puts us on a slippery slope towards crony capitalism,” the billionaire investor said Thursday at the Economic Club of New York.

The Citadel founder thinks domestic companies could enjoy a short-term benefit of having their competitors taken away. Longer term, however, it does more harm to corporate America and the economy as companies lose competitiveness and productivity.

Crony capitalism is an economic system marked by close, mutually advantageous relationships between business leaders and government officials.

“Those same companies that enjoy that momentary sugar rush of having their competitors removed from the battlefield, soon become complacent, soon take for granted their newfound economic superiority, and frankly, they become less competitive on both the world stage and less competitive at meeting the needs of the American consumer,” Griffin said at the event.

Trump made universal tariffs a core tenet of his economic campaign pitch, floating a 20% levy on all imports from all countries with a specifically harsh 60% rate for Chinese goods.

The protectionist trade policy could make production of goods more expensive and raise consumer prices, just as the world recovers from pandemic-era inflation spikes.

“Now you’re going to find the halls of Washington really filled with the special interest groups and the lobbyists as people look for continued higher and higher tariffs to keep away foreign competition, and to protect inefficient American businesses have failed to meet the needs of the American consumer,” Griffin said.

At the same event, Griffin also said that he’s not focused on taking Citadel Securities public in the foreseeable future. Citadel is a market maker founded by Griffin in 2002.

“We’re focused on building the business, on investing in our future. And we do believe that there are benefits to being private during this period of very, very rapid growth,” he said.

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Stocks making the biggest moves midday: NFLX, GOOGL, NVDA, BJ

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CFPB expands oversight of Apple Pay, other digital payments services

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Rohit Chopra, director of the CFPB, testifies during the Senate Banking, Housing and Urban Affairs Committee hearing titled “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress,” in the Dirksen Building on Nov. 30, 2023.

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The Consumer Financial Protection Bureau on Thursday issued a finalized version of a rule saying it will soon supervise nonbank firms that offer financial services likes payments and wallet apps.

Tech giants and payments firms that handle at least 50 million transactions annually will fall under the review, which is meant to ensure the newer entrants adhere to the laws that banks and credit unions abide by, the CFPB said in a release. That would include popular services from Apple and Google, as well as payment firms like PayPal and Block.  

While the CFPB already had some authority over digital payment companies because of its oversight of electronic fund transfers, the new rule allows it to treat tech companies more like banks. It makes the firms subject to “proactive examinations” to ensure legal compliance, enabling it to demand records and interview employees.

“Digital payments have gone from novelty to necessity and our oversight must reflect this reality,” said CFPB Director Rohit Chopra. “The rule will help to protect consumer privacy, guard against fraud, and prevent illegal account closures.”

A year ago, the CFPB said it wanted to extend its oversight to tech and fintech companies that offer financial services but that have sidestepped more scrutiny by partnering with banks. Americans are increasingly using payment apps as de facto bank accounts, storing cash and making everyday purchases through their mobile phones.

The most popular apps covered by the rule collectively process more than 13 billion consumer payments a year, and have gained “particularly strong adoption” among low- and middle-income users, the CFPB said on Thursday.

“What began as a convenient alternative to cash has evolved into a critical financial tool, processing over a trillion dollars in payments between consumers and their friends, families, and businesses,” the regulator said.

The initial proposal would’ve subjected companies that process at least 5 million transactions annually to some of the same examinations that the CFPB conducts on banks and credit unions. That threshold got raised to 50 million transactions in the final rule, the agency said Thursday.

Payment apps that only work at a particular retailer, like Starbucks, are excluded from the rule.

The new CFPB rule is one of the rare instances where the U.S. banking industry publicly supported the regulator’s actions; banks have long felt that tech firms making inroads in financial services ought to be more scrutinized.

The CFPB said the rule will take effect 30 days after its publication in the Federal Register.

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