Apple is teaming up with Alibaba (9988.HK) to introduce artificial intelligence features for iPhone users in China, The Information reported on Tuesday, citing a source with direct knowledge of the decision.
The partnership ends months of speculation over Apple’s AI strategy in the Chinese market, where it has been losing ground to domestic competitors like Huawei, which has integrated AI tools into its smartphones since last year. Following the news, Apple’s stock climbed 1.5% in early trading, while Alibaba’s U.S.-listed shares rose 2.6%.
Apple initially selected Baidu as its primary AI partner in China but reportedly dropped the company due to concerns over its model development progress. It later considered AI solutions from Tencent, ByteDance, Alibaba, and Deepseek but ultimately passed on Deepseek due to its limited resources.
The AI tools co-developed by Apple and Alibaba are now awaiting approval from China’s cyberspace regulator before their official rollout. This development is seen as critical for Apple, as iPhone sales in China dipped during the holiday quarter, a typically strong sales period. The lack of AI-driven features has been cited as a key factor in the decline.
Apple expects a rebound in sales this quarter, and its partnership with Alibaba—leveraging the e-commerce giant’s vast consumer data—could play a vital role in offering more personalized AI services for Chinese iPhone users. Both Apple and Alibaba have yet to comment on the report.
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