Morning Brief

1. Netflix Plans to Acquire Warner Bros.’ Film Studio and HBO Max Streaming Business for USD 72 Billion
2. “Baidu Name Directory” Found Used in Multiple Official Lists
3. Meta Plans Major Cuts to Metaverse Budget, Shifts Spending Toward AI Devices
4. Cloudflare Suffers Another Service Outage
5. Russia Blocks FaceTime Citing Security Concerns
6. Doubao AI Mobile Assistant Restricts Functions in Score-Farming, Finance, and Gaming

Netflix Plans to Acquire Warner Bros.’ Film Studio and HBO Max Streaming Business for USD 72 Billion

According to The Wall Street Journal, on December 5, streaming giant Netflix announced that it had reached an agreement to acquire Warner Bros.’ film studio and its HBO Max streaming business for USD 72 billion in cash and stock. Under the terms of the deal, parent company Warner Bros. Discovery will carry out a spin-off plan, separating its traditional cable TV networks — including CNN, TNT, and TBS — before selling its entertainment production and streaming division to Netflix. This marks the largest acquisition in Netflix’s history and is expected to close within 12 to 18 months.

The transaction values Warner Bros. stock at USD 27.75 per share, with the total enterprise value of the assets involved reaching approximately USD 82.7 billion. Previously, competitor Paramount had proposed an all-cash offer of USD 30 per share to acquire the entire Warner operation, including its cable network assets. However, Warner’s board favored Netflix’s proposal because it allows shareholders to retain equity in the spun-off cable TV business while also receiving Netflix shares — resulting in a combined potential value of USD 31 to 32 per share, surpassing Paramount’s full acquisition offer.

Through this acquisition, Netflix would gain access to one of Hollywood’s largest content libraries, including Harry Potter, Friends, the DC Extended Universe, and HBO’s premium original programming. Netflix Co-CEO Ted Sarandos described the deal as a rare opportunity to secure long-term competitive advantage and pledged to preserve Warner Bros.’ traditional theatrical distribution model post-acquisition, ensuring that select films will continue to premiere in cinemas before arriving on streaming.

The deal, however, faces significant antitrust scrutiny. Officials from the Trump administration have already voiced concerns that the merger could excessively strengthen Netflix’s global dominance. Paramount, whose bid was rejected, also sent a letter to Warner asserting that regulatory challenges may render the deal impossible to complete. Following the announcement, U.S. markets closed with Netflix shares down nearly 3%, Warner Bros. shares up more than 6%, and Paramount — the failed bidder — plunging nearly 10%.

“Baidu Name Directory” Found Used in Multiple Official Lists

According to The Paper, a document titled 10,000 Common Chinese Names on Baidu Wenku has recently been linked to several suspected falsification cases. Fake names listed in the document were directly copied into official rosters across multiple domains, sparking widespread public concern over procedural integrity and review mechanisms. These names were used to “build” expert panels in government procurement announcements, fill out award lists for competitions, and even appear in a public administrative penalty notice. Among them, “Zhang Jiwei, Lin Guorui, Lin Wenshu, Lin Yanan, Jiang Yiyun” appeared so frequently that they became known as “the busiest five people on the entire internet.”

Examples include—

• In 2024, the Liaoning Science and Technology Enterprise Knowledge Transfer Platform and the Yingkou Science and Technology Enterprise Knowledge Transfer Platform published lists of individuals who passed the non-public senior professional title review. Several names on the lists matched those in the “Name Directory”;
• In 2023, a graduation results announcement on the website of Guangzhou General Vocational and Technical School listed 110 students, many of whose names were identical to those in the directory, and the exam scores were fabricated;
• In 2023, the “Luoxia Cup National Painting and Calligraphy Seal-Carving Competition,” jointly organized by Shuhua Art Network and provincial associations in Shanxi and Jiangsu, featured numerous awardees whose names came directly from the directory;
• In 2022, in a public notice by the School of Humanities at Hangzhou Normal University for recipients of a welfare lottery public fund project, several names and their exact sequence fully matched the directory. The university released a statement on December 6 admitting staff misconduct, offering a sincere apology, and accepting public criticism;
• In 2019, the Chengdu Recreational Environment Technology Research Institute published results for a project-funding review. Zhang Jiwei appeared as project lead, teaming up with Lin Guorui, Cai Yiyun, and Chen Zhengqian to submit a project. Following on-site and correspondence reviews by experts, the project was approved. These four individuals, along with many others on the public notice, overlapped with names in the directory.

New cases of identical names are still continuously being uncovered and exposed.

Meta Plans Major Cuts to Metaverse Budget, Shifts Spending Toward AI Devices

According to Bloomberg, sources reveal that Meta CEO Mark Zuckerberg plans to drastically reduce investment in the company’s Metaverse initiatives. Meta executives are currently discussing a proposal to cut the Metaverse team’s 2026 budget by as much as 30%, with a new round of layoffs potentially beginning as early as January. A Meta spokesperson confirmed the resource reduction, noting that the freed-up funds will be redirected to fast-growing projects such as AI-powered smart glasses and other wearable devices.

The proposed cuts stem from Meta’s annual budget planning meeting held last month at Zuckerberg’s Hawaii estate. At the meeting, Zuckerberg asked all departments to identify 10% budget reductions, though the Metaverse division was assigned far more aggressive targets. Sources explained that this is largely due to the Metaverse failing to generate the level of industry-wide competition Meta had once anticipated. The reductions are expected to focus on the VR team behind the Quest headsets and the Horizon Worlds virtual social platform — the two largest cost drivers of Meta’s Metaverse spending.

This shift marks a significant strategic reorientation for Meta. Since the 2021 rebrand from Facebook to Meta, Reality Labs — the division overseeing the Metaverse — has accumulated losses exceeding USD 70 billion. Although Zuckerberg maintains that humanity will ultimately work and live in virtual worlds, he has rarely mentioned the Metaverse in recent public appearances or earnings calls, instead turning attention to large language models that power chatbots and to AI-integrated hardware such as Ray-Ban smart glasses.

For years, investors have criticized the massive spending on the Metaverse for draining company resources without generating meaningful revenue. Following news of the budget cuts, Meta’s stock rose 3.4% to USD 661.53. Analysts widely believe that reducing investment in the long-unprofitable Metaverse will allow Meta to compete more effectively with its industry rivals in the generative AI space.

Cloudflare Suffers Another Service Outage

Internet infrastructure provider Cloudflare has confirmed that it has resolved a global service outage that occurred on Friday, December 5. The incident caused widespread delays and connection errors across the internet, affecting numerous banking and financial institution websites, video conferencing platform Zoom, and professional networking service LinkedIn, among others.

Cloudflare reported that the outage lasted about 30 minutes. The company’s investigation found that the issue was not caused by a cyberattack but by a misconfiguration introduced during an attempt to patch a security vulnerability (CVE-2025-55182) in its React server components. The configuration change inadvertently triggered a logic error that resulted in a surge of HTTP 500 internal server errors. Cloudflare noted that such logic flaws could have been avoided in strongly typed programming languages, and the new Rust-based architecture it is rolling out has already addressed this risk.

This marks Cloudflare’s second major outage in less than a month. As a core pillar of global internet infrastructure, Cloudflare’s services are relied on by countless companies for website acceleration and cybersecurity protection. A single point of failure at Cloudflare often produces cascading effects, knocking offline thousands of unrelated websites simultaneously.

Cloudflare publicly apologized via social media, acknowledging that both incidents exposed weaknesses in its global configuration system, including the lack of staged rollouts and automated health checks. The company stated that it is conducting a comprehensive review to ensure network stability, and will accelerate the deployment of “fail-open” safeguards and stricter release validation procedures.

Russia Blocks FaceTime Citing Security Concerns

According to Reuters, on December 4, Russia’s federal communications regulator Roskomnadzor officially blocked Apple’s FaceTime video-calling service within the country. In its statement, Roskomnadzor cited law enforcement claims that FaceTime had been used “to organize and carry out terrorist attacks, recruit perpetrators, and commit fraud against Russian citizens,” though it provided no concrete evidence to support these allegations.

As a result, users across Moscow reported being unable to use the service on Thursday; calls showed only a “user unavailable” message, and recipients could not answer even if they saw the incoming call. Apple has not yet responded. FaceTime is a core communication tool within the Apple ecosystem, known for its end-to-end encryption; the ban means Russian Apple users have now lost a major encrypted communication channel.

This move is the latest escalation in Russia’s ongoing crackdown on Western tech platforms. Authorities have already imposed varying levels of restrictions on Google’s YouTube, Meta’s WhatsApp, and Telegram. On December 3, Roskomnadzor also blocked the U.S. gaming platform Roblox, citing the spread of extremist materials and illegal content. In August, the agency accused WhatsApp and Telegram of refusing to share anti-terrorism and anti-fraud information with law enforcement and subsequently restricted voice-call functionality on both platforms.

Alongside restricting foreign services, Russia is pushing domestically developed alternatives in pursuit of “digital sovereignty.” This year, the government launched MAX, an official communications app intended to fill the void left by departing foreign platforms. Despite external concerns over possible data surveillance, Russian state media maintains that these measures are legitimate actions to safeguard national information security.

Doubao AI Mobile Assistant Restricts Functions in Score-Farming, Finance, and Gaming

According to Caixin, on December 5, Doubao announced that it would implement standardized restrictions on certain AI-driven phone operations, including—though not limited to—score-farming, reward-farming, financial app interactions, and gaming-related scenarios.

Earlier on December 1, ByteDance’s Doubao AI model released the “Doubao Mobile Assistant” technical preview, integrated into the engineering prototype nubia M153 developed with ZTE, which was sold in limited quantities. Following the news, ZTE’s stock hit its daily limit, and the ¥3499 prototype sold out the same day. On the evening of December 3, after encountering risk-control blocks that prevented normal use of WeChat, Doubao disabled the assistant’s ability to operate WeChat.

Doubao stated in its announcement that although the nubia M153 is merely a small-batch engineering prototype running a preview version, public attention far exceeded expectations. The concept of “AI operating your phone” sparked substantial discussion. The adjustment, Doubao says, “is a necessary step to ensure the technology develops steadily and sustainably.”

Among the newly restricted scenarios, “score-farming and reward-farming” refers to retention-oriented incentives provided by apps that depend on real user interaction and therefore do not want AI collecting rewards. For banking and fintech applications, Doubao noted that although sensitive operations require explicit user authorization, it would still suspend AI operation of such apps out of caution. For certain gaming scenarios, Doubao said that because they involve competitive ranking, AI assistance will be temporarily disabled to maintain fairness.

Doubao added that it will continue communicating with stakeholders to promote clearer, more predictable rules and “avoid blanket prohibitions that deny users the reasonable right to use AI.” Doubao reiterated that the AI assistant will not replace users in completing authorizations or sensitive actions; during long-running tasks, clear on-screen prompts will be displayed, and users may interrupt at any time, keeping the process fully controllable.

Tensions among internet service companies, smartphone makers, and AI model developers are becoming increasingly visible. Recently, WeChat stopped supporting AI bookkeeping features on OPPO phones, and Bilibili no longer allows AI assistants to summarize video content. As early as 2017, when Honor was still under Huawei, its Magic smartphone featured AI functions that recommended restaurants based on WeChat and Alipay behavior — prompting Tencent to file a complaint with China’s Ministry of Industry and Information Technology, accusing Huawei of violating user privacy.

Rumors to Take With a Grain of Salt

• On December 4, AI search engine company Perplexity announced that global football star Cristiano Ronaldo (CR7) will invest in the company. Perplexity has also signed Ronaldo as a global brand ambassador and launched an interactive fan hub dedicated to him on its platform. Terms of the deal were not disclosed. According to recent Bloomberg estimates, Ronaldo’s net worth is roughly USD 1.4 billion. A few weeks ago, Ronaldo also met with Donald Trump, sparking speculation about potential business collaborations.
• Bloomberg reports that Johny Srouji — widely regarded as the chief architect of Apple’s in-house chips and currently a senior vice president — has informed CEO Tim Cook that he is considering leaving the company. To retain this key talent, Apple is reportedly weighing a promotion that would make Srouji the company’s Chief Technology Officer (CTO), though such a move could trigger complex internal power-balance issues. Apple has recently been facing a wave of executive departures. According to The Wall Street Journal, LinkedIn data shows that in recent months, dozens of Apple engineers working in audio, watch design, and robotics have left for OpenAI.
• On December 6, Elon Musk posted on X stating that he hopes to open-source all of X’s code next month — “with no reservations.”
• According to The Wall Street Journal, sources reveal that SpaceX is preparing a new secondary stock sale, seeking a valuation as high as USD 800 billion. If completed, SpaceX would surpass OpenAI to become the most valuable private tech company in the United States. CFO Bret Johnsen has reportedly informed investors of the sale plan, and executives have indicated that the company is considering an initial public offering (IPO) in 2026. Thanks to its dominance in rocket launches and the rapid growth of its Starlink business, SpaceX continues to be highly favored by investors.