How can one of the world’s largest smartphone companies lose money by selling more smartphones than ever? I think we all know the answer: soaring memory prices caused by the AI boom. Samsung just announced that despite “solid” smartphone sales and growing revenue, its DX division (which includes mobile) posted its first-ever loss of 800 billion won ($544 million) in the company’s second fiscal quarter.

“Although MX (Mobile eXperience) saw revenue growth year-over-year driven by solid sales of flagship products centered on the Galaxy S26 series and strong sales of the A series, operating profit decreased due to increased cost burdens across the industry, such as rising component costs,” the company said. (The DX division also includes TVs and appliances, but the loss was primarily in the mobile MX category.)

Samsung emphasized that flagship-level products like the Galaxy S26 Ultra and Galaxy Z Fold 8 series performed well, profit-wise. However, budget phones struggled to show a profit due to higher component costs and already-thin margins (Samsung foreshadowed this possibility back in April). As a result, the company plans to focus on “high-value-added products” in order to drive growth in future quarters.

With all that, consumers can expect higher smartphone prices across all categories from Samsung and other brands. This inflation will hit low-income buyers the hardest, as prices for smartphones in the $200-500 category will likely rise the most, percentage-wise. 

Samsung, of course, has a huge advantage over most manufacturers, as it also manufactures the memory and storage components used in smartphones. In that area, the company absolutely smashed it this quarter. 

“The Device Solutions (DS) Division posted a [quarter-on-quarter] sales increase of 56 percent, with the Memory Business setting an all-time high for quarterly revenue and operating profit,” Samsung wrote. 

Overall, Samsung posted a record 171.5 trillion ($119 billion) won in consolidated revenue (up 28 percent from last year), an all-time quarterly high. Operating profit also hit an all time high of 89.5 trillion ($62.2 billion). “Earnings per share for both common and preferred shares increased by 52 percent to… among the highest levels for global tech companies,” Samsung added. With all that money rolling in and shareholders happy, that puts less pressure on its mobile division — unless the AI bubble bursts, of course.

Meta founder and CEO Mark Zuckerberg is trying to sell investors on his prediction for the future — one where billions of people will have their own personal AI agents in the next five years. (Let’s hope that future also comes with data centers efficient enough to power all those agents — without triggering a fresh wave of climate disasters.)

“I think that it’s extremely unlikely if you look out five years from now, for example — whatever period of time you want — that you don’t have billions of people with a personal agent that understands your goals and that is just working on your behalf 24/7 to achieve your goals in whatever the domain is that you care about,” Zuckerberg said on Wednesday’s quarterly earnings call with investors.

He added that he could see people using these agents to help them with their finances, health, interpersonal relationships, and household management.

“As we move toward a future where we’re all interacting with multiple agents, I think that WhatsApp and our other messaging surfaces are going to become increasingly important,” he said, noting that WhatsApp is already the leading platform where users interact with Meta AI.

Meta is not alone in setting high expectations for AI systems that can act on a person’s behalf rather than just answer questions. Google emphasized custom AI agents as a key new feature in its Search overhaul, which sparked outcry from users who felt bogged down by the constant onslaught of AI results on Google. Meanwhile, subscriptions to Anthropic’s Claude have skyrocketed as engineers fawn over the agentic coding assistant Claude Code.

Compared to its competitors, however, Meta may not enjoy as much confidence from investors as it continues dumping cash into innovative projects that may or may not pan out — Meta’s stock dropped almost 10% after posting this quarter’s earnings. Meta’s Reality Labs, the organization responsible for its AR glasses, VR headsets, and related software, lost around $4.6 billion this quarter, roughly in line with the losses the division has posted each quarter since 2021. That’s a running total now of around $88 billion.

Meta’s AI spending is likely to climb even higher, which is more of a concern at this juncture. The company reported free cash flow of $784 million this quarter, down from $8.55 billion the same quarter last year. That’s a 91% drop year over year, exacerbated by the company’s investments in AI infrastructure. This week, Meta and BlackRock announced a partnership to build a $14 billion data center in El Paso, Texas.

“We believe that there will continue to be a significantly higher margin on selling intelligence rather than selling compute directly, but we think that there’s a big opportunity, obviously, to sell compute as well,” Zuckerberg said.

Ultimately, he believes that the personal agents that Meta is developing will be “the foundation for our next wave of products and revenue lines in the months and years ahead.”

So far, Meta’s business agents, rolled out globally on WhatsApp and Messenger this quarter, have been adopted by more than one million businesses. It may be harder to get people to adopt consumer AI agents, but the road to “billions” has to start somewhere — the company can’t get there on enterprise agents alone.

Thousands of ads for “nudify” apps on Meta-owned Facebook and Instagram have been traced back to GatherOne, one of Meta’s 11 Chinese advertising partners, according to a report published on Sunday by the Tech Transparency Project.

Nudify apps give users the AI tools to digitally remove clothing from photos of people, typically women and children, placing their faces in nonconsensual, pornographic images and videos. One of the advertised apps had Google Play reviews alerting others to what one reviewer called “illegal child porn.”

The ads themselves featured women simulating sex acts.

Meta’s community standards state that it doesn’t allow the promotion of nudify apps. Its advertising standards say that objectionable content includes ads that contain nudity, sexually suggestive activities or depictions of people in explicit or sexually suggestive positions.

TTP’s research also found that many of these ads appeared to come from fake accounts. This further violates Meta’s ad standards, which prohibit advertisers from using “inauthentic assets” to deceive Meta or its users about their identity.

Meta and GatherOne’s responses

Because Facebook and Instagram are banned in China, the Chinese government and Meta reached a compromise: Chinese advertisers must use a handpicked third-party agency, such as GatherOne, to run ads on these social media platforms.

While TTP was investigating the ads and the accounts behind them, it noticed that Meta had removed many of them.

“We do not allow non-consensual intimate imagery or nudify apps on our platform and we take aggressive steps to combat them: blocking links to sites that host this content, restricting related search terms, removing over 340,000 violating ads late last year alone and, when appropriate, taking legal action,” Cindy Southworth, Meta’s head of women’s safety policy, said in a statement provided to CNET. “Because confronting these persistent bad actors is an industry-wide challenge, we also proactively share information through Lantern so other platforms can act.”

Lantern is a Tech Coalition program that allows tech companies to share signals about child sexual abuse material, grooming manuals and other illegal content.

However, TTP said GatherOne’s accounts are still advertising, acknowledging that because the marketing agency generates so many ads — over 30,000 per month — Meta may be struggling to remove them all. While Meta’s ad review process includes multiple layers of analysis and detection, some of these occur only after an ad goes live.

Following publication of the report, GatherOne told TTP that it “suspended new ad account applications related to AI nudify, face swap and girlfriend services,” and told Bloomberg that it’s “undertaking a comprehensive compliance upgrade to address the technical evolution of synthetic [AI] media.”

In 2024, Meta reported that it generated $18.35 billion in China revenue, which accounted for 11% of its global revenue. Referencing Meta’s internal documents, Reuters said in December 2025 that more than $3 billion, or about 19%, of that 2024 China revenue came from ads for pornography, illegal gambling and other banned content.

What Meta is doing to address nudify apps

In a news release published by Meta in June 2025, the company said it’s taking action against nudify apps, stating that it filed a lawsuit in Hong Kong against Joy Timeline HK Limited, the company behind CrushAI, to prevent it from advertising on Meta’s platforms. Joy Timeline HK Limited isn’t one of Meta’s Chinese advertising partners.

Along with stating that it’s building new technology that can detect nudify app ads, Meta said in its release that it will “continue to take the necessary steps — which could include legal action — against those who abuse our platforms like this.”

In a March 2026 integrity report, Meta said that it removed 344,000 ads promoting nudify apps on Instagram and Facebook between November 2025 and January 2026. Cease-and-desist letters were sent to 46 companies that advertised these apps, but the company names aren’t listed.

“GatherOne works with companies across the internet, including Google, TikTok and X,” Ryan Daniels, Meta spokesperson, said in a statement sent to CNET. “All advertisers have to comply with our advertising standards, and failure to comply with our policies and standards can lead to the cancellation of ads placed, financial penalties and termination of ad accounts.”

Yet, while many of GatherOne’s ads were taken down, no action has been taken against GatherOne to prevent it from posting explicit or nudify app ads. A GatherOne representative didn’t respond to a request for comment.

Anna Gragert

Senior Editor, Health and Home

Anna Gragert (she/her/hers) was previously the lifestyle editor at HelloGiggles, the deputy editor at So Yummy and the senior lifestyle editor at Hunker. Over the past 12 years, Anna has also written for the LA Times, Elle, Bust Magazine, Dazed, Apartment Therapy, Well+Good and more. At CNET, she’s a senior editor on the Healthy Home team, and her coverage includes health, wellness tech, meal kits and home and kitchen tech with a focus on the technology that aims to help us live our healthiest, happiest lives.

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What should you do once you’ve finished? Why, play some more word games of course. I’ve also got daily Strands hints and answers and Quordle hints and answers articles if you need help for those too, while Marc’s Wordle today page covers the original viral word game.

Mythos helped to find a new meet-in-the-middle technique that relies on a Möbius Bridge, a more sophisticated fingerprinting algorithm used in meet-in-the-middle attacks. Using it, Green said, the code Mythos produced was able to reduce the number of required inputs to 2⁸⁹. Anthropic said that savings can reduce the time required for such attacks by 200- to 800-fold.

The ability to produce that many inputs makes the attack beyond reach outside of the laboratory. Further, the actual speed-up is unknown, since the weakened AES algorithm tested used only 7 rounds. Specification-compliant AES, Green said, uses 10, 12, or 14 rounds, depending on key size.

Anthropic is careful to explicitly spell out most of these caveats. The Monday blog post goes on to argue, however, that the results are nonetheless meaningful and could ultimately fundamentally disrupt the process of cryptanalysis, or the adversarial testing of cryptosystems.

“The cybersecurity community is now grappling with the fact that language models are able to discover so many bugs that the standard human processes (like vulnerability triage, verification, and remediation) struggle to keep up,” Anthropic wrote. “We predict that the same will soon be true in academic cryptography research. As language models increasingly produce novel research outputs autonomously, human researchers may become bottlenecked on studying and validating these results for technical validity, novelty, and utility.”

Not mentioned in Anthropic’s report is whether its researchers used Mythos to attack more tested cryptosystems, such as elliptic curve cryptography and RSA. Attack improvements against these systems would be more impressive. By achieving the most impressive result against an algorithm still in its infancy, it’s not clear how much of an advantage Mythos truly provided. There’s no way of knowing if researchers using conventional cryptanalysis techniques were already close to discovering the same attack.

Ultimately, the lesson from the research is simple. AI-assisted cryptanalysis remains untested, and providers of these platforms have a vested interest in exaggerating their benefits. At the same time, there’s growing evidence that LLMs may provide significant advantages in finding cryptographic weaknesses. It would be a mistake to conclude that LLMs won’t one day play an important role in the race between securing and compromising our most vital assets.

The headline and body of this story have been updated to reflect the withdrawing of HAWK.

The round builds on the company’s $4.2m pre-seed round in 2025 and will be used to scale and grow the organisation’s quantum ambitions.

Zuriq, a quantum computing company based out of Switzerland, has announced a seed funding round of $25.5m. 

The round was led by Quantonation, with participation from Forward.one, Extantia, Firgun Ventures and additional previous round investors. The company raised a $4.2m pre-seed round in 2025.

Zuriq is a spin-out of ETH Zürich and intends to use the funds to scale its trapped-ion quantum processors and expand its team alongside research and development efforts as it works to significantly increase the number of qubits its architecture can support. 

According to the organisation, the majority of trapped-ion quantum computers are based on a decades-old design in which ions are held in one-dimensional chains stitched together into larger grids using complex junction structures. 

Zuriq claims to have taken a novel approach with processors that are natively two-dimensional and infrastructure that allows ions to move freely in any direction without the junctions that constrain reconfiguration.

Prof Jonathan Home, a scientific adviser at Zuriq and professor of the Department of Physics at ETH Zürich, said: “What makes this approach powerful is geometry. Hold ions in a line and the count grows one at a time, hold them in two dimensions and it grows with the area of the chip, on a standard chip, that is the difference between tens of ions and many thousands. 

“Just as important, the ions can be moved freely in three dimensions, so they can be connected together far more flexibly, and that connectivity is what ultimately makes a quantum computer more capable. Reaching the scale and connectivity that real applications will need has been the central challenge for the whole field.”

Zuriq has stated it is now turning its attention to scaling its technology and plans to increase the number of ions on a chip to enable powerful, commercially useful machines. 

Christophe Jurczak, a founding partner at Quantonation, said: “A common misconception is that the quantum race is already decided, but that is far from reality. Zuriq is demonstrating that there remain significant and transformational physics breakthroughs still to be made in quantum architectures. 

“The scientific calibre of the team is world-class, which is why Zuriq has been phenomenally successful in attracting global talent to join them and build 2D-native quantum computers where trapped-ion qubits finally have the freedom to move and connect.”

Also this week (27 July), Multiverse Computing, which is based in San Sebastián, Spain, announced a $570m Series C funding round at a $1.7bn pre-money valuation. 

The funds are expected to go towards expanding the company’s model library, continuing research and development, investing in sovereign AI infrastructure and building out a regional presence in east and south-east Asia, the Middle East, Canada and the US.

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