Apple selects Alibaba for introducing AI capabilities in China
"Alright, so here's the deal: Apple's chosen to team up with Alibaba, and they're thrilled about it. According to Alibaba's chairman, Joe Tsai, Apple's seen potential in Alibaba's AI capabilities and wants to leverage it for their phones. No specifics about when this partnership will hit the market or if Alibaba will be Apple's exclusive AI partner were given, though. The Information first reported this news, mentioning that Apple considered several other Chinese AI companies before settling on Alibaba.
Now, let's talk about regulations and Apple's limited markets for AI services. You see, Apple's had to play by China's rules, meaning they've only managed to introduce their AI service, Apple Intelligence, to select markets, like the US, Canada, UK, and Australia. The Chinese government requires foreign AI operators to work with a local company and acquire approval.
Apple's losing ground in China to domestic rivals like Huawei and Vivo, and they're hoping AI services can help pull them back up. But Lucas Zhong, a Canalys research analyst, says Apple faces a tough challenge in China with Huawei's resurgence. Relying solely on AI services might not be enough to turn the tide.
Huawei races ahead with a 16% market share in China, surpassing Apple's 15% in 2023, as per Canalys' stats. Apple bounced back and became the top mobile phone seller in China in 2023, with 19% of the market share. Huawei trails behind, holding 12%.
The partnership with Alibaba has given investors confidence in Alibaba, causing their Hong Kong-listed shares to soar by over 40% since hitting a two-year low in January. It's a win-win situation for both parties.
On the same day, DeepSeek, a Chinese startup, announced an impressive AI model that impressed Wall Street. Just a few days later, Alibaba presented its latest version of Qwen AI model, boasting it was superior to its competition's R1 model.
Elon Musk, the tech mogul, announced that his company xAI's large language model, Grok 3, would soon be available. Grok 3, according to Musk, is reportedly outperforming all other AI chatbots available in the market. Musk founded xAI with the goal of outperforming OpenAI and other AI giants like Google."
Enrichment data:
- The partnership between Apple and Alibaba was officially announced on February 12, 2025, with the purpose of incorporating advanced AI features into iPhones for the Chinese market.
- Apple and Alibaba have already handed over the AI features they developed to China's cyberspace regulator for approval.
- The launch of Apple Intelligence in China is expected to occur before Apple's Shanghai developer conference on March 25, 2025.
- The partnership between Apple and Alibaba is exclusive to the Chinese market, as foreign AI operators must comply with Chinese regulations.
- International versions of Apple Intelligence use OpenAI's GPT models instead of Alibaba's Qwen models.
- Any AI models associated with Apple Intelligence required to be released in China will need to receive approval from the Chinese cyberspace regulator.
In light of the partnership with Alibaba, Apple is looking to utilize their advanced AI capabilities to enhance their phones, specifically targeting the Chinese market. To fully leverage this tech-business collaboration, Apple needs approval from China's cyberspace regulator for the AI features they've developed with Alibaba.
