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The transforming power of artificial intelligence is of no value unless user data is protected, George Zhao, CEO of Chinese smartphone company Honor, told CNBC in an exclusive interview.
His comments come as Apple this month announced it will start rolling out personalized AI tools on certain devices in the U.S. this fall.
“We say user data doesn’t leave [the device],” Zhao said. “This is a principle we adhere to.”

Honor CEO George Zhao (L) and GSMA CEO John Hoffman on stage at Shanghai Mobile World Congress during an awards ceremony on June 27, 2024.

HANGZHOU, China — The transforming power of artificial intelligence is of no value unless user data is protected, CEO of Chinese smartphone company Honor, George Zhao, told CNBC in an exclusive interview on Thursday.
His comments come as Apple this month announced it will start rolling out personalized AI tools on certain devices in the U.S. this fall.

Honor already integrates some AI functions, such as enabling users to open text messages and other notifications just by looking at them, or eliminating copy-paste steps by directly linking Yelp-like apps to navigation or ride-hailing apps.
This week at Mobile World Congress in Shanghai, Honor unveiled new AI tools for detecting the use of deepfakes in videos, and for simulating lenses that can decrease myopia during long hours of screen usage.
Zhao emphasized that Honor’s approach is to keep AI operations involving personal data limited to the smartphone. It’s also known as on-device AI, and stands in contrast with AI tools that tap cloud computing to operate.

“Without data security and user privacy protection, AI will become worthless,” Zhao said in Mandarin, translated by CNBC. “This has always been one of our value propositions.”
“We say user data doesn’t leave [the device],” Zhao said. “This is a principle we adhere to.”

Apple Intelligence, the iPhone company’s AI product, claims that it uses on-device processing and draws on “server-based models” for more complex requests. Apple said its new “Private Cloud Compute” never stores user data.
Honor says its on-device AI is self-developed, and the company is working with Baidu and Google Cloud for some other AI features.
“Overall, my view is that AI’s development to date has two directions,” Zhao said. “Network [cloud] AI has become more and more powerful. But I believe on-device AI, in its capabilities and empowerment of consumers, will become more and more intimate, more and more understanding.”
“It will give consumers more support and help them interact with the future AI world,” he added.

Zhao pointed out that many generative AI applications, such as from OpenAI’s ChatGPT, require large amounts of computing power well beyond the battery capability of a single smartphone.
That means they need to use the cloud, which raises questions about the security of data transfer.
Balancing AI capabilities with energy usage and data privacy is a “huge challenge” for manufacturers, Zhao said.
He said a system collecting lots of user data to deliver more personalized features becomes a “stronger” object compared to the individual using the system.
“In the future development of smartphones, our goal is that the individual becomes stronger,” Zhao said.
“When an object becomes stronger, this will reveal the smallness of the individual in its presence. I believe mobile end devices need to empower and enable individuals.”

The Honor Magic V2, the latest foldable smartphone from the Chinese manufacturer, is on display at the Mobile World Congress 2024 in Barcelona, Spain.
Nurphoto | Nurphoto | Getty Images

Honor’s Magic V2 folding phone, which launched in China last summer and in Europe earlier this year, won the “Best Smartphone in Asia Award” at the Shanghai MWC this week.
The Magic V2 folds up nearly as thin as an iPhone.
Honor is set to release the Magic V3 in July with the company’s latest AI functions.
When asked whether the new foldable would be even thinner, Zhao only said, “Of course, we need to challenge ourselves, right?” More

A photo illustration of the Chewy logo is seen on a smartphone and a PC screen.
Pavlo Gonchar | SOPA Images | Lightrocket | Getty Images

Chewy shares rallied dramatically on Thursday after meme stock leader Roaring Kitty posted a picture on social media platform X that resembles the logo of the online pet food retailer, but the gains were quickly erased later in the session.
Roaring Kitty, whose legal name is Keith Gill, has stirred up trading in speculative names such as GameStop by posting cryptic images and memes online. A picture of a cartoon dog appeared on his X feed Thursday afternoon, briefly driving up Chewy shares as much as 34% to $39.10.The stock later fell into negative territory again in Thursday’s session, closing the day down 0.3%.

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There’s also a strong connection between meme stock GameStop and Chewy. GameStop CEO Ryan Cohen was the founder and CEO of Chewy, who was instrumental in PetSmart’s takeover of Chewy in 2017 and its subsequent initial public offering in 2019.
Cohen joined the GameStop board of directors along with two other Chewy executives in January 2021, partly helping fuel the initial GameStop rally. He later took over as GameStop CEO in 2023, leading a turnaround in the brick-and-mortar video game retailer.
Shares in pet retailers such as Chewy and Petco saw big spikes during the pandemic when stuck-at-home consumers adopted cats and dogs in droves. With the adoptions came purchases of needed accessories such as new beds and leashes for their furry family members.
But as the pandemic ended and people began venturing outside again, adoption numbers slowed and consumers had less need for discretionary pet items such as toys and cages, which carry higher profit margins than pet food.
Over the past year or so, Chewy and Petco have seen consistently strong pet food sales, but revenue for higher margin categories has fallen.
Gill is a former marketer for Massachusetts Mutual Life Insurance. He came into the limelight after successfully encouraging retail investors to buy GameStop shares and call options in 2021 to squeeze out short-selling hedge funds. The mania in 2021 led to a series of congressional hearings featuring Gill in brokers’ practices and the “gamification” of retail trading.

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International Monetary Fund (IMF) Managing Director Kristalina Georgieva speaks during the 2024 CNBC CEO Council Summit in Washington, D.C. on June 4, 2024.
Shannon Finney | CNBC

The Federal Reserve should wait to cut interest rates until “at least” the end of the year, according to the head of the International Monetary Fund. The U.S. is the only G20 economy to see growth above pre-pandemic levels, and “robust” growth indicates ongoing upside risks to inflation, the 190-country agency said.
“We do recognize important upside risks,” IMF Managing Director Kristalina Georgieva said at a press briefing on Thursday. “Given those risks, we agree that the Fed should keep policy rates at current levels until at least late 2024.” The Fed’s current fed funds rate has stood within the range of 5.25% to 5.50% since July 2023.

The IMF, often called the world’s “lender of last resort,” forecasts that the core personal consumption expenditures price index — the Fed’s preferred measure of inflation — will end 2024 at around 2.5% and reach the Fed’s 2% target rate by mid-2025, ahead of the Fed’s own projection for 2026.
U.S. economic strength during the Fed’s rate-hike cycle was aided by labor supply and productivity gains, Georgieva said, while highlighting the need for “clear evidence” that inflation is coming down to the 2% target before the Fed cuts rates.
Nonetheless, the IMF’s “more optimistic” assessment of the downward inflation trajectory is based on indications of a cooling labor market in the U.S. and weakening consumer demand.
“I want to recognize that a lesson we learned from the last [few] years is we are at a time of more uncertainty. This uncertainty also lies ahead. We are confident, however, that the Fed will move through that, and certainly with the same prudence it has demonstrated over the last year,” Georgieva said.
Correction: A previous version of this article misstated Kristalina Georgieva’s name.

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JPMorgan Chase said late Wednesday that the Federal Reserve overestimated a key measure of income for the giant bank’s recent stress test, and that its losses under the exam should actually be higher than what the regulator found.
The bank took the unusual step of issuing a press release minutes before midnight ET to disclose its response to the Fed’s findings.
The error means that JPMorgan might require more time to finalize its share repurchase plan, according to a person with knowledge of the situation.

JPMorgan Chase CEO and Chairman Jamie Dimon gestures as he speaks during the U.S. Senate Banking, Housing and Urban Affairs Committee oversight hearing on Wall Street firms, on Capitol Hill in Washington, D.C.
Evelyn Hockstein | Reuters

JPMorgan Chase said late Wednesday that the Federal Reserve overestimated a key measure of income in the giant bank’s recent stress test, and that its losses under the exam should actually be higher than what the regulator found.
The bank took the unusual step of issuing a press release minutes before midnight ET to disclose its response to the Fed’s findings.

JPMorgan said that the Fed’s projections for a measure called “other comprehensive income” — which represents revenues, expenses and losses that are excluded from net income — “appears to be too large.”
Under the Fed’s table of projected revenue, income and losses though 2026, JPMorgan was assigned $13 billion in OCI, more than any of the 31 lenders in this year’s test. It also estimated that the bank would face roughly $107 billion in loan, investment and trading losses in that scenario.
“Should the Firm’s analysis be correct, the resulting stress losses would be modestly higher than those disclosed by the Federal Reserve,” the bank said.
The error means that JPMorgan might require more time to finalize its share repurchase plan, according to a person with knowledge of the situation. Banks were expected to begin disclosing those plans on Friday after the market closes.
The news is a wrinkle to the Federal Reserve’s announcement yesterday that all 31 of the banks in the annual exercise cleared the hurdle of being able to withstand a severe hypothetical recession, while maintaining adequate capital levels and the ability to lend to consumers and corporations.

Last year, Bank of America and Citigroup made similar disclosures, saying that estimates of their own future income differed from the Fed’s results.
Banks have complained that aspects of the annual exam are opaque and that it’s difficult to understand how the Fed produces some of its results. More

Which is the greatest rivalry in tennis? Older players might reminisce about the “fire and ice” contests between the cool-headed Bjorn Borg and the tempestuous John McEnroe; those a generation younger might rave about the all-American duels between Andre Agassi and Pete Sampras. After a two-decade-long era dominated by rivalries between Roger Federer, Rafael Nadal and Novak Djokovic, younger players are at last starting to shine. Carlos Alcaraz and Jannik Sinner, aged just 21 and 22, respectively, produce electric tennis—and have claimed four grand-slam titles between them since 2022. Do not be surprised if they meet again at Wimbledon, which starts on July 1st.Yet these matchups look tame in comparison with the all-out war being waged between recreational players of tennis and those of pickleball—a sport that has gained widespread popularity in recent years, and which can be played on the same surface. In 2022 police in San Diego, California, had to be called to mediate a dispute when some pickleballers staged a takeover of a local tennis club. In Arlington, Virginia, a group called “Team Pickle-nah” leafleted the area around tennis courts due to be converted into pickleball ones, accusing pickleballers of hijacking courts, bullying children and urinating in public. More

From some angles it seems as if thermal coal, the world’s dirtiest fuel, is having a tough year. Prices are down a bit. China, which gobbles up over half the world’s supply, is in economic trouble; a surge in hydropower generation there is squeezing out the fuel. In May G7 members agreed to phase out coal plants, where emissions are not captured, by 2035. Mining stocks are trading at a huge discount.Chart: The Economist More

Queues of idle trucks trying to enter America are standard fare at Mexico’s border. Recently, however, vehicles at the Otay Mesa crossing, which separates California and the city of Tijuana, have been lining up to get into Mexico. The trucks do not travel far—they offload their shipping containers in newly built warehouses just 15km south of the border. The goods are then separated into thousands of small packages and driven back to America. Although such imports are made in China and purchased in America, no tariffs are paid. Call it the Tijuana two-step.Chart: The Economist More

Sixteen years ago American stockmarkets reached their modern nadir. During the early 2000s European and emerging-market equities went on a bull run. By March 2008 America had entered recession and its financial crisis was under way. The country’s stocks accounted for less than 40% of the world’s total stockmarket capitalisation.Fast-forward to today and things look rather different. America’s share of the world’s stockmarket capitalisation has climbed pretty consistently over the past decade and a half, and sharply this year. It now stands at 61%. That is astonishing dominance for a country which accounts for just over a quarter of global GDP. The extent of market concentration is all the more extreme given what is happening within the American stockmarket itself. Just three companies—Apple, Microsoft and Nvidia—make up a tenth of the market value of global stocks. More