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George Zhao, Chief Executive Officer of Chinese consumer electronics brand Honor, smiles as he shows the new Honor Magic 6 Pro smartphones during a presentation on the eve of the Mobile World Congress (MWC), the telecom industry’s biggest annual gathering, in Barcelona on February 25, 2024.

Pau Barrena | Afp | Getty Images

George Zhao, the chief executive of Chinese smartphone firm Honor, has resigned from his position due to personal reasons, the company said on Friday.

“The company and the Board of Directors sincerely appreciate Mr Zhao’s outstanding contributions to the company during his tenure,” Honor said in a statement.

Jian Li, who’s been at Honor for four years in various senior management positions, will succeed Zhao as CEO.

In an internal memo posted by Chinese media and confirmed as accurate by an Honor spokesperson, Zhao said he was stepping down due to health reasons and planned to rest, recover and spend more time with his family.

Zhao called the decision to leave Honor “the most difficult decision” he has ever made.

Honor was spun off from Chinese telecommunications giant Huawei in 2020 in a bid to avoid U.S. sanctions that were crippling Huawei’s smartphone business.

Under Zhao’s leadership, Honor has aggressively launched smartphones with a focus on international markets. Zhao focused on high-end devices, including foldable smartphones, as he looked for Honor to look beyond China and challenge the likes of Samsung and Apple.

Honor’s market share in China has risen from 9.8% in 2020 to over 15% in 2024, according to Counterpoint Research. Outside of China, Honor’s market share hit 2.3% in 2024, compared to under 1% in 2020.

The company has looked to keep pace with rivals by launching artificial intelligence features on its device.

Neil Shah, partner at Counterpoint Research, said the company’s focus on high-end devices and technology is likely to continue under the new leadership.

“Honor’s focus on premiumization should continue if the brand wants to continue building its brand equity and differentiation point vs existing competitors, especially in premium markets such as Europe,” Shah told CNBC. 

“The focus on innovative foldable designs and advanced AI features and close partnerships with leading component suppliers would be key.”

Zhao’s successor Li will be tasked with trying to expand Honor’s presence overseas amid fierce competition, with a focus on making the brand more recognizable.

“Many don’t know Honor” outside of China, Counterpoint’s Shah said. “Building brand equity is tough and the company needs more time, money and differentiation points.”

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OpenAI’s Sora 2 must stop allowing copyright infringement, Motion Picture Association says

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OpenAI's Sora 2 must stop allowing copyright infringement, Motion Picture Association says

Cfoto | Future Publishing | Getty Images

The Motion Picture Association on Monday urged OpenAI to “take immediate and decisive action” against its new video creation model Sora 2, which is being used to produce content that it says is infringing on copyrighted media.

Following the Sora app’s rollout last week, users have been swarming the platform with AI-generated clips featuring characters from popular shows and brands.

“Since Sora 2’s release, videos that infringe our members’ films, shows, and characters have proliferated on OpenAI’s service and across social media,” MPA CEO Charles Rivkin said in a statement.

OpenAI CEO Sam Altman clarified in a blog post that the company will give rightsholders “more granular control” over how their characters are used.

But Rivkin said that OpenAI “must acknowledge it remains their responsibility – not rightsholders’ – to prevent infringement on the Sora 2 service,” and that “well-established copyright law safeguards the rights of creators and applies here.”

OpenAI did not respond to a request for comment.

Concerns erupted immediately after Sora videos were created last week featuring everything from James Bond playing poker with Altman to body cam footage of cartoon character Mario evading the police.

Although OpenAI previously held an opt-out system, which placed the burden on studios to request that characters not appear on Sora, Altman’s follow-up blog post said the platform was changing to an opt-in model, suggesting that Sora would not allow the usage of copyrighted characters without permission.

However, Altman noted that the company may not be able to prevent all IP from being misused.

“There may be some edge cases of generations that get through that shouldn’t, and getting our stack to work well will take some iteration,” Altman wrote.

Copyright concerns have emerged as a major issue during the generative AI boom.

Disney and Universal sued AI image creator Midjourney in June, alleging that the company used and distributed AI-generated characters from their films and disregarded requests to stop. Disney also sent a cease-and-desist letter to AI startup Character.AI in September, warning the company to stop using its copyrighted characters without authorization.

WATCH: OpenAI’s Sora 2 sparks AI ‘slop’ backlash

OpenAI's Sora 2 sparks AI 'slop' backlash

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Billionaire tech investor Orlando Bravo says ‘valuations in AI are at a bubble’

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Billionaire tech investor Orlando Bravo says 'valuations in AI are at a bubble'

Orlando Bravo: AI valuations are in a bubble

Thoma Bravo co-founder Orlando Bravo said that valuations for artificial intelligence companies are “at a bubble,” comparing it to the dotcom era.

But one key difference in the market now, he said, is that large companies with “healthy balance sheets” are financing AI businesses.

Bravo’s private equity firm boasts more than $181 billion in assets under management as of June, and focuses on buying and selling enterprise tech companies, with a significant chunk of its portfolio invested in cybersecurity.

Bravo told CNBC’s “Squawk on the Street” on Tuesday that investors can’t value a $50 million annual recurring revenue company at $10 billion.

“That company is going to have to produce a billion dollars in free cash flow to double an investor’s money, ultimately,” he said. “Even if the product is right, even if the market’s right, that’s a tall order, managerially.”

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OpenAI recently finalized a secondary share sale that would value the ChatGPT-maker at $500 billion. The company is projected to make $13 billion in revenue for 2025.

Nvidia recently said it would invest up to $100 billion in OpenAI, in part, to help the ChatGPT maker lease its chips and build out supercomputing facilities in the coming years.

Other public companies have soared on AI promises, with Palantir’s market cap climbing to $437 billion, putting it among the 20 most valuable publicly traded companies in the U.S., and AppLovin now worth $213 billion.

Even early-stage valuations are massive in AI, with Thinking Machines Lab notching a $12 billion valuation on a $2 billion seed round.

Despite the inflated numbers, Bravo emphasized that there’s a “big difference” between the dotcom collapse and the current landscape of AI.

“Now you have some really big companies and some big balance sheets and healthy balance sheets financing this activity, which is different than what happened roughly 25 years ago,” he said.

Oracle shares fall on report the company is struggling to make money renting out Nvidia chips

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Oracle stock slips 5% on report company is seeing thin cloud margins from Nvidia chips

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Oracle stock slips 5% on report company is seeing thin cloud margins from Nvidia chips

Oracle shares fall on report the company is struggling to make money renting out Nvidia chips

Oracle stock slipped 5% on Tuesday after a report from The Information that raised questions about the company’s plans to buy billions of Nvidia chips to rent as a cloud provider to clients like OpenAI.

Oracle had 14% gross margins on $900 million in sales in its Nvidia cloud business in the three months ending in August, according to the report, which cited internal documents. That’s significantly lower than Oracle’s overall gross margin of around 70%.

The report said that Oracle’s recent transformation into one of the most important cloud and artificial intelligence companies may run into profitability challenges because of how expensive Nvidia chips are and aggressive pricing on its AI chip rentals.

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In September, Oracle said that its backlog of cloud contracts, which it called remaining performance obligations, had jumped 359% in a year. It forecasted $144 billion in cloud infrastructure revenue in 2030, up from just over $10 billion in 2025.

Much of that forecasted revenue is from Oracle’s role in the Stargate project, in which the enterprise vendor is working with OpenAI to open five massive data centers filled with AI chips from Nvidia.

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Year-to-date stock chart for Oracle.

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