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Samsung Electronics CEO wants to build an 'AI-driven company'

Samsung Electronics plans to ramp up its on-device AI business, with the aim of exceeding global market growth in the consumer electronics segment this year.

The global consumer electronics market for smartphone, TV and home appliances will grow roughly 3% in 2025, Jong-Hee Han, chief executive officer of Samsung Electronics, told CNBC’s Chery Kang.

Samsung, the world’s largest smartphone and TV maker, expects its mobile devices business to grow by 4%-5% this year, while growth in TV and home appliances unit is also likely to accelerate, said Han, also the head of device eExperience (DX) division of Samsung Electronics.

Samsung Electronics has been ramping up efforts to connect its devices to artificial intelligence, installing AI chips in its fridges, washing machines and robot vacuum cleaners.

It has also been bolstering its AI functions on its premium flagship smartphone models, such as the Galaxy S24 series, which has multiple AI-enabled features including real-time translation of certain foreign language phone calls.

This comes as Chinese brands such as Huawei and Xiaomi have emerged as serious competitors to Samsung by offering high-end smartphones at significantly lower prices.

Competition from Chinese companies is ‘helpful” for Samsung and the consumers, Han said during the interview, noting that the company aims to differentiate its products with more security and convenience, rather than lowering prices.

AI chip delays

Samsung announced a major leadership reshuffle in November, putting Jun Young-hyun as co-CEO and head of the memory chip arm, sharing leadership duties with Han.

The South Korean tech giant, once the dominant force in the memory chip sector, has fallen behind SK Hynix in the race to supply high bandwidth memory chips, or HBM chips, that are a key component for AI leader Nvidia.

Samsung Electronics CEO says competition with China is 'helpful'

Samsung will reportedly issue its fourth-quarter revenue and operating profit forecasts on Wednesday, before releasing quarterly results in late January.

Samsung operating profit for the December quarter is expected to come in at 8.2 trillion won ($5.6 billion), according to Reuters estimates, a notable uptick from 2.8 trillion won it reported a year earlier, but down from 9.18 trillion won in the prior quarter.

In October, Jun, the semiconductor division head, issued a rare apology for the company’s disappointing third-quarter performance.

Last year, shares of the South Korean giant plunged 32%, according to LSEG data, lagging the broader benchmark Kospi’s 9.6% loss.

Samsung expects first-quarter profit to soar 931% as memory chip prices rebound

The share price has “never been this low before,” Han said during the interview, adding that the company has “value-up” plan, aimed at increasing shareholders’ returns. The plan will be announced “one by one when it’s in order,” he said, according to a CNBC translation of his statement in Korean.

Investors are hoping for Samsung to close the gap on HBM and get more serious about its “value-up” scheme, Phillip Wool, head of research at Rayliant Global Advisors said in a note Monday, while adding that the 10-trillion won share buyback plan may help stabilize the stock’s price.

The company unveiled a surprise plan in November to buy back about 10 trillion won worth of shares over the following 12 months.

Peter Lee, an analyst at Citi, cautioned in a note on Dec. 31, that a longer-than-expected delay in getting Nvidia’s approval for its HBM chips and weaker PC sales could continue to pose downside risks. He maintained a “buy” rating on the stock while trimming its target price to 83,000 won from 87,000 won.

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Microsoft confirms performance-based job cuts across departments

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Microsoft confirms performance-based job cuts across departments

Microsoft Chairman and CEO Satya Nadella speaks at a press briefing on the company’s campus in Redmond, Washington, on May 20, 2024.

Jason Redmond | AFP | Getty Images

Microsoft is cutting a small percentage of jobs across departments, based on performance, the company confirmed to CNBC on Wednesday.

“At Microsoft we focus on high-performance talent,” a Microsoft spokesperson said in an email to CNBC on Wednesday. “We are always working on helping people learn and grow. When people are not performing, we take the appropriate action.”

Business Insider reported on the plans late Tuesday.

The job cuts will affect less than 1% of employees, said a person familiar with the matter who asked not to be named in order to discuss private information.

Microsoft had 228,000 employees at the end of June. While the company’s net income margin of nearly 38% is close to its highest since the early 2000s, Microsoft’s stock underperformed its peers last year, rising 12% while the Nasdaq gained 29%.

Microsoft’s latest cuts are slim compared to recent downsizing efforts.

In early 2023, the company laid off 10,000 employees and consolidated leases. In January 2024, three months after completing the $75.4 billion Activision Blizzard acquisition, Microsoft’s gaming unit shed 1,900 jobs to reduce overlap.

As 2025 begins, Microsoft faces a more tenuous relationship with artificial intelligence startup OpenAI, which the company has backed to the tune of over $13 billion. The partnership helped propel Microsoft’s market cap past $3 trillion last year.

Over the summer, Microsoft added OpenAI to its list of competitors. Microsoft CEO Satya Nadella used the phrase “cooperation tension” while discussing the relationship with investors Brad Gerstner and Bill Gurley on a podcast released last month.

Meanwhile, the Microsoft 365 Copilot assistant, which draws on OpenAI technology, has yet to become pervasive in business. Analysts at UBS said in a note last month that they came away from Microsoft’s Ignite conference with the impression that Copilot rollouts “have been a bit slow/underwhelming.”

Microsoft is still touting its growth opportunities. Finance chief Amy Hood said in October that revenue growth from Microsoft’s Azure cloud will speed up in the first half of this year because of greater AI infrastructure capacity.

WATCH: Microsoft plans to spend $80 billion to build out AI this year

Microsoft plans to spend $80 billion to build out AI this year

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Nvidia’s Jensen Huang is ‘dead wrong’ about quantum computers, D-Wave CEO says

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Nvidia's Jensen Huang is 'dead wrong' about quantum computers, D-Wave CEO says

D-Wave CEO responds to Jensen Huang's quantum comments

D-Wave Quantum CEO Alan Baratz said Nvidia’s Jensen Huang is “dead wrong” about quantum computing after comments from the head of the chip giant spooked Wall Street on Wednesday.

Huang was asked Tuesday about Nvidia’s strategy for quantum computing. He said Nvidia could make conventional chips that are needed alongside quantum computing chips, but that those computers would need 1 million times the number of quantum processing units, called qubits, that they currently have.

Getting “very useful quantum computers” to market could take 15 to 30 years, Huang told analysts.

Huang’s remarks sent stocks in the nascent industry slumping, with D-Wave plunging 36% on Wednesday.

“The reason he’s wrong is that we at D-Wave are commercial today,” Baratz told CNBC’s Deirdre Bosa on “The Exchange.” Baratz said companies including Mastercard and Japan’s NTT Docomo “are using our quantum computers today in production to benefit their business operations.”

“Not 30 years from now, not 20 years from now, not 15 years from now,” Baratz said. “But right now today.”

D-Wave’s revenue is still minimal. Sales in the latest quarter fell 27% to $1.9 million from $2.6 million a year earlier.

Quantum computing promises to solve problems that are difficult for current processors, such as decoding encryption, generating random numbers and large-scale simulations. Technologists have been working on it for decades, and companies including Nvidia, Microsoft and IBM are pursuing it today, alongside researchers at startups and universities.

Jensen Huang, co-founder and chief executive officer of Nvidia Corp., speaks while holding a Project Digits computer during the 2025 CES event in Las Vegas, Nevada, US, on Monday, Jan. 6, 2025. Huang announced a raft of new chips, software and services, aiming to stay at the forefront of artificial intelligence computing. Photographer: Bridget Bennett/Bloomberg via Getty Images

Bloomberg | Bloomberg | Getty Images

D-Wave was among a number of companies that enjoyed a revival of interest from investors in December, when Google announced a breakthrough in its own research. Google said it had completed a 100 qubit chip, the second of six steps in its strategy to build a quantum system with 1 million qubits.

D-Wave shares soared 178% in December after popping 185% the month prior. Quantum company Rigetti Computing, which plummeted 45% on Wednesday, quintupled in value last month. IonQ dropped 39% on Wednesday. The stock rose 14% in December following a 143% rally in November.

Baratz acknowledged that one approach to quantum computing, called gate-based, may be decades away. But he said uses an annealing approach, which can be deployed now.

While Huang’s “comments may not be totally off-base for gate model quantum computers, well, they are 100% off base for annealing quantum computers,” Baratz said.

Nvidia declined to comment.

Even after Wednesday’s slide, D-Wave shares are up about 600% in the last year, giving the company a market cap of $1.6 billion.

Quantum computing has also been boosted by investor interest in artificial intelligence, the technology that’s led to surging demand for Nvidia’s graphics processing units, which use conventional transistors instead of qubits. Nvidia’s market cap has increased by 168% in the past year to $3.4 trillion.

Baratz said D-Wave systems can solve problems beyond the capabilities of the fastest Nvidia-equipped systems.

“l’ll be happy to meet with Jensen any time, any place, to help fill in these gaps for him,” Baratz said.

WATCH: D-Wave CEO responds to Huang’s comments

D-Wave CEO responds to Jensen Huang's quantum comments

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EBay shares soar after Meta allows listings on Facebook Marketplace in U.S., Europe

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EBay shares soar after Meta allows listings on Facebook Marketplace in U.S., Europe

A sign is posted in front of the eBay headquarters in San Jose, California.

Justin Sullivan | Getty Images

Shares of eBay soared 8% Wednesday as Meta said it will allow some listings to show up on Facebook Marketplace, its popular platform connecting consumers for local item pickups and more.

EBay stock reached its highest level since November 2021.

The rollout will begin with a test in Germany, France and the United States, where buyers will be able to view listings directly on Marketplace and complete the rest of their transactions on eBay, Meta said in a release.

The partnership could provide a boost to eBay’s marketplace business, which has struggled to compete with e-commerce rivals like Amazon, Walmart, Temu and even Facebook’s own marketplace platform that lets users buy and sell items.

EBay has recently embraced niche categories like collectibles and luxury goods to try and keep buyers and sellers returning to its site. CEO Jamie Iannone told CNBC in an October interview that shoppers were coming to the site, known for its used and refurbished goods, as they sought out discounts amid a rocky macroeconomic environment.

Meta’s move is an attempt to appease the European Commission, the executive body of the European Union, after the regulator fined the company 797 million euros ($821 million) in November for tying its Marketplace product to the main Facebook app.

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At the time, the Commission said that Meta’s bundling of Marketplace with Facebook could mean competitors are effectively “foreclosed” given the distribution reach of the platform. Facebook counts more than 3 billion users globally.

The Commission also said that Meta imposes “unfair trading conditions” on other online classified ads service providers who advertise on its platforms, especially Facebook and Instagram. It added that these conditions allow Meta to use data generated from other advertisers to benefit Marketplace.

Meta appealed the ruling at the time, saying that it “ignores the realities of the thriving European market for online classified listing services.”

“While we disagree with and continue to appeal the European Commission’s decision on Facebook Marketplace, we are working quickly and constructively to build a solution which addresses the points raised,” the company said Wednesday.

EBay touted its integration with Facebook Marketplace as a way for the e-commerce site to “increase exposure to our sellers’ listings, on and off eBay, as part of our strategy to engage buyers and deepen customer loyalty.”

Facebook in 2023 announced a similar partnership with Amazon that lets users browse and purchase products without leaving the app.

WATCH: Will AI stocks push higher in 2025? Nvidia investor shares his outlook

CNBC Pro Talks: Will AI stocks push higher in 2025? Nvidia investor shares his outlook

Additional reporting by CNBC’s Annie Palmer.

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