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    United Airlines’ summer earnings and profit outlook top estimates, but revenue falls short

    United Airlines posted higher-than-expected earnings for the third quarter but revenue that missed Wall Street’s estimates.
    The carrier boosted capacity more than 7% in the third quarter while unit sales fell for both domestic and international travel.
    United said it expects an adjusted-earnings forecast of $3 to $3.50 a share in the fourth quarter.

    A United Airlines Boeing 737-MAX 8 aircraft departs at San Diego International Airport en route to New York on Aug. 24, 2024.
    Kevin Carter | Getty Images

    United Airlines on Wednesday forecast higher-than-expected earnings for the fourth quarter after a rocky start to 2025.
    The carrier expects to earn between $3 and $3.50 a share for the last three months of the year, compared with analysts’ estimate of $2.86 a share.

    United has been expanding its flying capacity, while its rivals have scaled back some of their growth plans after a glut of flights weighed on fares this year. The airline increased capacity 7% in the third quarter over last year. Unit passenger revenue for the three months ended Sept. 30 fell 3.3% for domestic travel and 7.1% for international. Sales from its lucrative loyalty program rose 9%.
    In an interview last month, United CEO Scott Kirby last month defended the airline’s growth plan and said the carrier was winning loyal customers through its network, new technology like complimentary inflight Wi-Fi, refreshed cabins and new lounges.
    “Those investments over almost a decade, combined with great service from our people, have allowed United to win and retain brand-loyal customers, leading to economic resilience even with macro economic volatility through the first three quarters of the year and significant upside as the economy and demand are improving in the fourth quarter,” Kirby said in a release on Wednesday.
    Still, for the third quarter, United beat earnings expectations, although its revenue fell short of estimates.
    Here is what United Airlines reported for the quarter that ended Sept. 30 compared with what Wall Street was expecting, based on estimates compiled by LSEG:

    Earnings per share: $2.78 adjusted vs. $2.62 expected
    Revenue: $15.23 billion vs. $15.33 billion expected

    United’s third-quarter revenue was $15.23 billion, up 2.6% from $14.84 billion last year. Net income fell 1.7% to $949 million or $2.90 a share. Adjusting for one-time items including debt, among other things, United posted income of $909 million or $2.78 a share.
    The carrier is vying with Delta Air Lines to win over more affluent travelers who shell out more for seats, and it has expanded its global network with far-flung destinations like Greenland and Mongolia. United said in the third quarter, its premium-cabin revenue, which includes first class and other, roomier seats, rose 6%. United’s sales from no-frills basic economy 4% year-over-year.
    In the spring and early summer, United and other carriers trimmed their earnings forecasts they made at the start of the year, after passenger demand dipped amid on-again-off-again tariffs, and an oversupply of flights weighed on airfare. More

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    CEOs of Wells Fargo and Pfizer caution the U.S. could lose its edge to China without innovation

    Wells Fargo CEO Charlie Scharf said AI is boosting productivity but will likely reduce workforce size.
    Pfizer CEO Albert Bourla warned China is closing the biotech and pharmaceutical patent gap rapidly and said the U.S. needs to focus on innovation.
    Speaking at CNBC’s inaugural Invest in America Forum, both CEOs agreed that the time is now for new investments in technology and manufacturing to ensure competition in the global economy.

    Albert Bourla, CEO of Pfizer, Charlie Scharf, Wells Fargo & Company CEO and Kathy Warden, Northrop Grumman Chair & CEO speak during the Invest in America Forum on Oct. 15, 2025.
    Aaron Clamage | CNBC

    Wells Fargo CEO Charlie Scharf and Pfizer CEO Albert Bourla sounded the alarm Wednesday over the potential for the the U.S. to lose its competitive edge to China, but said artificial intelligence could help America maintain its lead.
    Speaking at CNBC’s inaugural Invest in America Forum in Washington, D.C., the two executives said that while the U.S. still leads in many sectors, inconsistent policy and underinvestment is ceding ground to China. AI, they said, poses both risks and benefits for the U.S. economy.

    Scharf said AI will likely reduce the size of workforces — but will boost productivity.
    “We will likely have less people, absolutely,” Scharf said. “When we look at the tools that we’ve implemented just for people that are coding, you see 20%, 30%, 40% improvement in coders. We haven’t reduced our head count by 20%, 30% or 40%. We’re actually doing more than we otherwise would have been able to do.”
    Wells Fargo big bank peers like JPMorgan and Goldman Sachs are already hiring fewer people because of AI advancements.
    Scharf also said the financial sector is poised for major regulatory changes despite an ongoing political stalemate in Washington.
    “We ultimately do expect significant changes in capital requirements, liquidity requirements,” he said. “We do expect to see changes which will allow people in the industry, not just big banks and medium-sized banks, but smaller banks as well, to do more in these [local] communities.”

    Bourla, meanwhile, expressed concern about China’s growing strength in biotechnology and pharmaceuticals, pointing to a surge in research and development spending, regulatory reforms and a national strategy focused on life sciences.
    “They [China] filed more patents this year than the U.S.,” Bourla said. “That’s never happened in history. Five years ago, the split was 90%-10%. … The gap is closing, but they probably will become [better than us] unless we get our act together.”
    Bourla urged the U.S. to shift focus from trying to slow China’s progress toward improving its own productivity and innovation.
    “We spend more time trying to think about how to slow down China rather than think how we can become better than them,” Bourla said. “We need to have regulatory changes here. We need to have stability. Tariffs and pricing was not helping.”
    Pfizer recently agreed to a drug pricing deal with the Trump administration as part of a broader effort to remove long-standing uncertainties around pricing, Medicaid reimbursements and distribution. As part of the agreement, Pfizer secured a three-year exemption from pharmaceutical-specific tariffs, contingent on additional investments in U.S. manufacturing. 
    “Tariffs and the uncertainty of drastic correction of U.S. pricing — with this deal, we are removing both uncertainties,” Bourla said Wednesday.
    He also called artificial intelligence the next frontier for medicine, predicting that AI will revolutionize drug discovery by dramatically accelerating timelines for finding treatments for diseases like Alzheimer’s and cancer.
    “We tried for years to find cures … AI will make it happen,” Bourla said. More

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    Would inflation-linked bonds survive an inflationary default?

    Perhaps the biggest headache for any investor is that no asset offers complete safety. Inflation gnaws away at cash; gold might offer protection but its price has soared so high that it feels less like insurance than chasing a hot trade. Rich-world government bonds are supposed to be havens, and have historically done better than cash at outpacing consumer prices. Just now, though, plenty of governments are borrowing so much that it is worryingly easy to imagine them letting the money-printers whir and inflating away their debt. More

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    Big banks like JPMorgan Chase and Goldman Sachs are already using AI to hire fewer people

    Big banks including JPMorgan Chase and Goldman Sachs are unveiling plans to reimagine their businesses around AI, technology that allows for the mass production of knowledge work.
    Even during a blockbuster year for Wall Street as trading and investment banking spins off billions of dollars in excess revenue, the companies are hiring fewer people.
    The comments around artificial intelligence from the largest U.S. banks mirror those from tech giants including Amazon and Microsoft.

    Jamie Dimon, chief executive officer of JPMorgan Chase & Co., at the Institute of International Finance (IIF) during the annual meetings of the IMF and World Bank in Washington, DC, US, on Thursday, Oct. 24, 2024. 
    Kent Nishimura | Bloomberg | Getty Images

    The era of artificial intelligence on Wall Street, and its impact on workers, has begun.
    Big banks including JPMorgan Chase and Goldman Sachs are unveiling plans to reimagine their businesses around AI, technology that allows for the mass production of knowledge work.

    That means that even during a blockbuster year for Wall Street as trading and investment banking spins off billions of dollars in excess revenue — not typically a time the industry would be keeping a tight lid on head count — the companies are hiring fewer people.
    JPMorgan said Tuesday in its third-quarter earnings report that while profit jumped 12% from a year earlier to $14.4 billion, head count rose by just 1%.
    The bank’s managers have been told to avoid hiring people as JPMorgan deploys AI across its businesses, CFO Jeremy Barnum told analysts.
    JPMorgan is the world’s biggest bank by market cap and a juggernaut across Main Street and Wall Street finance. Last month, CNBC was first to report about JPMorgan’s plans to inject AI into every client and employee experience and every behind-the-scenes process at the bank.
    The bank has “a very strong bias against having the reflexive response to any given need to be to hire more people,” Barnum said Tuesday. JPMorgan had 318,153 employees as of September.

    JPMorgan CEO Jamie Dimon told Bloomberg this month that AI will eliminate some jobs, but that the company will retrain those impacted and that its overall head count could grow.

    ‘Constrain headcount’

    At rival investment bank Goldman Sachs, CEO David Solomon on Tuesday issued his own vision statement around how the company would reorganize itself around AI. Goldman is coming off a quarter where profit surged 37% to $4.1 billion.
    “To fully benefit from the promise of AI, we need greater speed and agility in all facets of our operations,” Solomon told employees in a memo this week.
    “This doesn’t just mean re-tooling our platforms,” he said. “It means taking a front-to-back view of how we organize our people, make decisions, and think about productivity and efficiency.”
    The upshot for his workers: Goldman would “constrain headcount growth” and lay off a limited number of employees this year, Solomon said.
    Goldman’s AI project will take years to implement and will be measured against goals including improving client experiences, higher profitability and productivity, and enriching employee experiences, according to the memo.
    Even with these plans, which is first looking at reengineering processes like client onboarding and sales, Goldman’s overall head count is rising this year, according to bank spokeswoman Jennifer Zuccarelli.

    Tech inspired?

    The comments around AI from the largest U.S. banks mirror those from tech giants including Amazon and Microsoft, whose leaders have told their workforces to brace for AI-related disruptions, including hiring freezes and layoffs.
    Companies across sectors have become more blunt this year about the possible impacts of AI on employees as the technology’s underlying models become more capable and as investors reward businesses seen as ahead on AI.
    In banking, the dominant thinking is that workers in operational roles, sometimes referred to as the back and middle office, are generally most exposed to job disruption from AI.
    For instance, in May a JPMorgan executive told investors that operations and support staff would fall by at least 10% over the next five years, even while business volumes grew, thanks to AI.
    At Goldman Sachs, Solomon seemed to warn the firm’s 48,300 employees that the next few years might be uncomfortable for some.
    “We don’t take these decisions lightly, but this process is part of the long-term dynamism our shareholders, clients, and people expect of Goldman Sachs,” he said in the memo. “The firm has always been successful by not just adapting to change, but anticipating and embracing it.” More

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    Kendra Scott expands into Western wear with new boot collection

    Kendra Scott is the latest company to jump on the Western wear trend with the launch of a new boot collection.
    The expansion through its Yellow Rose by Kendra Scott brand marks the first step in the company’s vision toward building a full wardrobe beyond just jewelry.
    Kendra Scott joins a growing number of companies leaning into Western style, denim and the cowgirl aesthetic.

    The Yellow Rose by Kendra Scott, the flagship store in Austin, TX.
    Courtesy: Douglas Friedman

    Kendra Scott, the company best known for its jewelry and single-pendant necklaces, is becoming the latest retailer to join the Western wear trend.
    The company on Wednesday announced its debut boots collection in an expansion outside of the accessories market. The brand will offer three styles, available in men’s and women’s, as part of the Yellow Rose by Kendra Scott line focused on Western style.

    “A lot of folks don’t know, but in the other half of my life, I take my heels off in the boardroom, and I throw my boots on and head to my ranch,” founder Kendra Scott told CNBC.
    Scott, who lives in Texas, said she grew up incorporating Western wear from denim to cowboy boots into her everyday style, in what she calls a “beautiful, timeless, classic look.” Slowly, Scott said she saw the trend take hold across the globe.
    “I’m sitting here going, well, this is my life everyday. This is authentically who I am and what I do,” Scott said. “I also noticed that there were a lot of Western brands out there that put cowboy first, and then they later think about the girl … so I was really excited to create a brand that put cowgirl front and center, but make it more modern.”
    Kendra Scott’s expansion into Western wear rides a larger wave of companies leaning into the style. The fast-growing market for cowboy boots is projected to reach $538.6 million by 2035, according to Future Market Insights.
    Other companies are taking notice. Retailers like Gap and Levi’s are marketing and innovating more denim products amid what’s become a “jeans war.” Wrangler is an exclusively Western wear brand that has leveraged the trend, and parts of American pop culture like the hit TV show “Yellowstone” and celebrities like Beyoncé are embracing the cowgirl aesthetic.

    Of course, more Western wear options for consumers means tougher competition for Kendra Scott as it enters the space.

    Branching out

    Scott set out to create Yellow Rose in 2023. The in-house brand eventually became separate brick-and-mortar stores that incorporate Western style into its jewelry designs. Scott said the company quickly saw customer excitement about the unique style, but it felt like the tip of the iceberg of the brand’s potential.
    Over the course of two years, the company tested modern Western apparel that was specifically designed for women, Scott said. The boots, she said, tie in the custom shapes that the jewelry brand is known for and include stitching and embroidery that give them a more “modern twist.”
    Scott said the collection is a “labor of love” with a specially shaped toe, a unique combination of leather and suede, multiple color choices and options for both men and women.

    Yellow Rose by Kendra Scott’s debut boots collection
    Source: Kendra Scott

    And the debut boot collection is just the first step toward building out a larger wardrobe, Scott said.
    “We’ve been at it for almost 24 years and really put our stake in the ground as this premier jewelry designing brand,” Scott said. “We’ve built trust and connection with our customer over two decades now, and that allows a brand like mine to be able to now think about [more].”
    Yellow Rose, named after Scott’s ranch and the Texas flower, is opening its fourth location – and the first outside of Texas – in the fourth quarter of 2025 in Nashville, Tennessee.
    The boots launch comes after the company branched out into eyewear at the beginning of this year, entering into a licensing agreement with Marchon Eyewear.
    Scott said the step into Western apparel is a significant next chapter for the brand.
    “It’s exciting because I think we’re at a really amazing place at Kendra Scott where this next 20 years is really going to be something that is kind of like literally, ‘hold on to your hat,’ because we’re on this launching pad that we’ve really been able to build that trust,” Scott said. “When we launch a new category, we make sure that we’re filling a void in the market and that we’re doing it with our own unique fingerprint.” More

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    Fed’s Miran sees China trade tensions as a further reason for quick interest rate cuts

    Fed Governor Stephen Miran said the latest impasse in trade talks between the U.S. and China poses new dangers to the economic outlook and makes the case for rate cuts even more urgent.
    Miran has advocated for another 1.25 percentage points in cuts on top of the quarter-point move the Federal Open Market Committee approved in September.

    Federal Reserve Governor Stephen Miran said Wednesday that the latest impasse in trade talks between the U.S. and China poses new dangers to the economic outlook and makes the case for rate cuts even more urgent.
    Speaking at the CNBC “Invest in America Forum” in Washington, D.C., the central bank policymaker noted the threat from China’s decision to restrict access to rare earths materials, which prompted a threat from President Donald Trump for 100% tariffs in Chinese imports.

    Miran said that the dispute raises the level of uncertainty during a year when it already had been running high.
    “I had been operating under the assumption that the uncertainty had dissipated, and therefore I felt more sanguine about some aspects of the growth outlook. Now, potentially, this is back because the Chinese are reneging on deals that were already made,” he told CNBC’s Sara Eisen. “So I think it’s incumbent on us as policymakers to think about the introduction of a new tail risk.”
    From a policy perspective, Miran said the situation only convinces him more that the Fed needs to move aggressively on interest rate reductions.
    During a tenure on the Fed that just began a month ago — and will end in January — Miran has advocated for another 1.25 percentage points in cuts on top of the quarter-point move the Federal Open Market Committee approved in September.
    “To the extent that I think policy is quite restrictive right now, that sets us up to be vulnerable to shocks. If you hit the economy with a shock when policy is very restrictive, the economy will react differently than it would if policy was not as restrictive,” he said. “I think it’s even more important now than I did a week ago that we move quickly to a more neutral stance.”
    The FOMC, of which Miran as a governor is a voter, next meets Oct. 28-29, when it is widely expected to approve another quarter-point reduction. More

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    Most U.S. consumers expect higher holiday prices and a weaker economy, survey finds

    The majority of U.S. consumers, 57%, said they expect the economy to weaken in the year ahead, Deloitte found, the most negative outlook since the consulting firm began tracking sentiment in 1997.
    On average, U.S. consumers plan to spend 10% less this holiday season as they seek out deals and anticipate higher prices.
    The pullback is sharper among members of Gen Z, who said they plan to spend 34% less than the year-ago holiday season.

    Gold prices edged lower on Wednesday as caution prevailed ahead of the U.S. consumer price inflation report that could provide more clarity on the Federal Reserve’s interest rate trajectory.
    David Paul Morris | Bloomberg | Getty Images

    As the peak holiday shopping season approaches, most U.S. consumers have a downbeat outlook on the economy, according to an annual Deloitte survey published Wednesday.
    Most consumers surveyed — 57% — said they expect the economy to weaken in the year ahead, the consulting firm found in a poll of roughly 4,000 respondents. That compares with 30% who expected a weaker economy ahead of the year-ago holiday season and 54% in 2008, one of the years of the Great Recession.

    It marks the most negative economic outlook since Deloitte began tracking that in 1997.
    Seventy-seven percent of people surveyed said they expect higher prices on holiday items, up from 69% last year, according to Deloitte. It’s the first holiday season since President Donald Trump’s latest wave of tariff hikes on many imports.
    “We’ve been talking about the resilient consumer for a while now, that despite all these pressures, the U.S. consumer continues to spend and we keep seeing growth and spending for retail,” said Brian McCarthy, retail strategy leader for Deloitte. “This outlook is starting to suggest that we’re getting towards the end of that resilience.”
    Consumers’ pessimistic mindset has factored into their spending plans during the holiday season. They plan to spend an average of $1,595, 10% less than the $1,778 they planned to spend in the year-ago period, as they brace for higher prices, according to the Deloitte survey.
    The lower anticipated spending cuts across all household income groups and nearly all generations, Deloitte found. Yet it was especially significant among younger shoppers.

    Gen Z consumers, which in the survey were between ages 18 and 28, said they plan to spend an average of 34% less this holiday season than a year ago. Millennials, respondents between age 29 and 44 in the poll, said they expect to spend an average of 13% less this holiday season.
    That compares with Gen X, which plans to spend an average of 3% more, and baby boomers, who expect to spend an average of 6% less.
    For Gen Z shoppers, the tighter holiday budget likely comes from feeling more uncertain and unstable early in their careers, McCarthy said.
    “They’re thinking about income and the job market and the concerns about the economy is going to throw a lot more pressure on them because they haven’t yet had time to sort of build up their savings or plan for less rosy economic environments,” he said.
    Mike Daher, U.S. consumer industry leader for Deloitte, said the age group is also “exposed to a lot of inflationary pressures around housing costs,” along with higher prices for everyday items like groceries.
    For retailers and brands, the findings add a note of caution to the most crucial sales period of the year. Other holiday forecasts have also found households expect to spend less, while still reflecting consumers’ appetite for decorating and giving gifts during the festive season.
    Holiday spending across stores and online is expected to rise 4% year over year, according to consulting firm Bain & Co., a drop from the 10-year average of 5.2% growth. A separate Adobe Analytics report found online holiday spending in the U.S. is expected to grow 5.3% year over year, but that would be slower than the year-ago increase of 8.7% year over year.
    Like Deloitte’s poll, consulting firm PwC’s survey indicated a holiday pullback among Gen Z consumers, who said they planned to spend 23% less than during the year-ago period. Overall, consumers said they expect to spend about 5% less – or an average total of $1,552 – on holiday gifts, travel and entertainment compared with the year-ago season, according to the PwC survey.
    The National Retail Federation, the major industry trade group, plans to share its holiday forecast in early November.
    Though holiday outlooks have varied, one of the dominant themes of this holiday season will be value-seeking, Deloitte’s McCarthy said. Even in the past several months, the firm has found a notable uptick in the number of U.S. consumers who have reported seeking deals. Across income groups, Deloitte’s survey indicated that 7 in 10 respondents are engaging in three or more deal-seeking behaviors, such as purchasing store brands or alternative ingredients, cooking more meals at home and buying used cars.
    As consumers watch their budgets, they told Deloitte they will cut back on holiday-related extras. On average, consumers said they plan to spend $397 on nongift holiday expenses, such as hosting, clothing and decor, a 22% drop from $507 a year ago.
    For gifts, however, the cut wasn’t as deep. On average, survey respondents said they plan to buy eight gifts compared with nine in the year-ago period and spend 6% less on average, a drop to $505 compared with $536 in the prior-year holiday season. More

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    Apple rival Honor launches AI phone tools that help users get online shopping discounts and more

    With the AI upgrade, Honor expects to climb into the top three smartphone brands by market share in mainland China by the end of this year, Fei Fang, president of products at Honor Device, told CNBC in an exclusive interview.
    Honor’s new AI tools come as Apple has yet to release its AI system in China.
    It’s part of how Honor expects people will use AI assistants to access apps rather than going to the apps directly.

    Chinese smartphone company Honor announced on Oct. 15 a slew of new AI features, including the ability to compare deals across different e-commerce sellers.
    CNBC | Evelyn Cheng

    BEIJING — Imagine if Amazon gave 20% discounts for every purchase made using an iPhone Air.
    That’s essentially how Chinese smartphone company Honor wants to attract local buyers — by giving them an on-device AI tool that lets them quickly compare deals across Chinese e-commerce sites, including JD.com and different merchants on Alibaba’s Taobao. In one example seen by CNBC, the Honor AI-powered shopping search helped save 20% since the tool was able to find coupons that a user might otherwise overlook.

    The features and a slew of other AI functions are set to roll out Wednesday on Honor’s newly launched Magic8 smartphone as well as the company’s other devices in China. The timing is notable. China is entering its busiest shopping season of the year akin to Black Friday: the Nov. 11 Singles Day promotional period.
    With the AI upgrade, Honor expects to climb into the top three smartphone brands by market share in mainland China by the end of this year, Fei Fang, president of products at Honor Device, told CNBC in an exclusive interview. That’s according to a CNBC translation of the remarks made in Mandarin.
    In the future, she expects that rather than opening smartphone apps directly, users will increasingly access the functions via an AI portal — which can then automatically provide customized services down the road.
    “We believe this will happen and we are working along this direction,” she said, noting Honor will release more AI features in sports, health and companionship at its own ecosystem conference on Oct. 23.
    Honor’s AI features are activated through the company’s “Yoyo” chatbot, which sits inside the company’s Android-based operating system called MagicOS.

    While Honor said the overseas market has come to account for about half of its revenue, the Shenzhen-based company must first take on Apple to recover the first spot in China.
    In the second quarter of this year, Huawei and Vivo shipped the most phones in China with 18% market share each, while Oppo and Xiaomi vied for second place at 16% share each, Counterpoint data showed. Apple had 15%, followed by Honor at 13%.
    Apple has tried to make a comeback in China this year. CEO Tim Cook visited Shanghai this week, according to his social media account, coinciding with news that the slim iPhone Air would finally begin sales in China this month — weeks after the new iPhone 17 hit stores.
    However, the U.S. smartphone giant has yet to release its AI features in China, despite Alibaba Group Chair Joe Tsai’s announcement this year that the company would work with Apple on the tech tools. Neither side has yet released additional details.

    AI chatbots

    Honor, which spun off from Huawei in 2020, signed a strategic partnership with Alibaba in September to co-develop AI smartphone features. Alibaba operates the Gaode maps app in China, a Fliggy travel booking platform, as well as the Taobao and Tmall e-commerce platforms.
    Fang emphasized that shopping is just one of many AI functions that Honor is releasing this week. Other tools include guiding users on how to take the best photo angle, suggesting nearby restaurants from just a photo of a specific location and hailing a taxi using a simple voice command.
    With a prompt as vague as “book me a ride back home,” the tech learns from on-device data and user preferences to automatically know what the home address is. Personal information stays on the smartphone and isn’t transferred to the cloud, Honor said. When it comes to payments, the user still needs to manually approve it, even if the AI helps with making the online order.
    The new AI features for China users also come as ChatGPT is starting to let U.S. users shop on Etsy, and soon Walmart, through the AI chatbot interface. Other AI chatbots can also search the internet for specific products.
    It remains to be seen whether AI will be consistently useful for consumers. But Honor said its edge comes from using AI to complete multiple steps, including accounting for individual e-commerce memberships and personalized coupons, to show consumers the cheapest option — with a prompt as simple as asking for the best deal on a product.
    Honor said most of its new AI features are based on a self-developed graphical user interface (GUI) AI model that learns from how a human interacts with a smartphone screen and across apps.
    The company claimed that the AI’s ability to learn has enabled rapid expansion from 200 tasks in July to more than 3,000 this fall.
    In other cases, Honor said it has agreements with companies such as food delivery giant Meituan and video-streaming platform Bilibili to allow the phone’s AI to interact with the Chinese apps’ systems using the “Model Context Protocol (MCP)” tech pioneered by Anthropic.

    Spending big first

    Honor also incorporates some AI functions from other companies, such as Kuaishou’s Kling AI video generation model. Since Kling and other tools charge per use, that comes at a cost to the smartphone company, which is offering the features to consumers for free right now, according to Fang.
    “This is one of our current challenges,” Fang said. “We have invested quite a lot of money in AI. But we believe we must first create value for consumers before commercialization.”
    Honor announced in March it would spend $10 billion on AI over the next five years. The company indicated it would make a significant portion of the initial investment this year.
    The spending is part of Honor’s ambitious plan announced in March to become an AI device company — and a platform to connect companies with consumers. Like Apple, Honor also sells smart watches, tablets and laptops.
    Outside of China, Honor works with Google for AI and is ranked fourth by market share in Europe as of the second quarter, according to Counterpoint.
    While Honor doesn’t have immediate plans to roll out AI-powered shopping overseas, the company at the Mobile World Congress in Barcelona in March showed off an AI agent for making restaurant reservations on OpenTable. More