By Casey Corridor
SHANGHAI (Reuters) -Alibaba will accomplice with Apple to help iPhones’ AI providers providing in China, its chairman mentioned on Thursday, a transfer probably to assist the U.S. firm ease falling smartphone gross sales in its key market.
For Alibaba, the partnership is a serious win in China’s aggressive AI market that’s dwelling to DeepSeek, which made headlines this yr with fashions developed at a fraction of the price of Western rivals.
The landmark deal additionally resolves months of hypothesis over Apple’s AI technique within the area because the iPhone maker had been in talks with Chinese language tech leaders together with Baidu, ByteDance and Tencent, Reuters and the Info have reported.
“They talked to quite a few corporations in China. Ultimately they selected to do enterprise with us. They need to use our AI to energy their telephones. We really feel extraordinarily honoured to do enterprise with an awesome firm like Apple,” Tsai mentioned on the World Authorities Summit in Dubai.
Whereas Apple’s telephones outdoors China make the most of a mixture of its proprietary Apple Intelligence and OpenAI’s ChatGPT, Tsai didn’t specify whether or not the Alibaba partnership would comply with an identical mannequin.
In China, consumer-facing AI merchandise require regulatory approval, and The Info reported earlier that each Alibaba and Apple have already submitted supplies to authorities.
The Hong Kong-listed shares of Alibaba jumped as a lot as 9.2% to HK$124.3, their highest since January 2022. The inventory pared positive factors to shut up 2.6%.
Apple didn’t instantly reply to a request for remark.
“As a substitute of viewing the Alibaba-Apple partnership by means of the lens of China’s AI energy, the partnership is principally a recognition of Alibaba’s AI functionality,” mentioned Lian Jye Su, a chief analyst at tech analysis agency Omdia.
Different analysts mentioned the influence for Apple would rely upon how briskly it rolled out options in China.
“It will not be a simple struggle because the native opponents have been aggressively advertising their very own AI options,” mentioned Will Wong, an analyst with analysis agency IDC.
CRITICAL TIME
The AI integration comes at a crucial time for Apple, which has confronted declining iPhone gross sales in China amid rising competitors from home rivals, notably Huawei.
Business analysts have pointed to the absence of superior AI options – a key promoting level in latest-generation smartphones – as a big drawback for Apple within the Chinese language market.
Apple suffered a notable setback in China in 2024, dropping its crown because the nation’s main smartphone vendor. For its fiscal first quarter ended Dec. 28, Apple’s Higher China gross sales plunged by 11% to $18.51 billion.