Apple has selected Chinese tech giant Alibaba to roll out AI services in China, resolving months of uncertainty over its AI expansion in the world’s largest mobile phone market.
“Apple has been very selective. They talked to a number of companies in China, and in the end, they chose to do business with us. They want to use our AI to power their phones,” said Joe Tsai, chairman of Alibaba, at the World Governments Summit in Dubai.
Although Tsai did not specify a release timeline or confirm whether Alibaba would be Apple’s exclusive partner, the partnership was first reported by The Information. Apple had also considered other Chinese AI firms like DeepSeek, Baidu, ByteDance, and Tencent before settling on Alibaba.
Regulatory hurdles have limited Apple’s AI service, Apple Intelligence, to select markets such as the U.S., Canada, U.K., and Australia. The Chinese government requires foreign AI operators to partner with local firms and secure regulatory approval.
Apple has been losing ground in China to domestic rivals such as Huawei and Vivo. Lucas Zhong, research analyst at Canalys, noted that while AI services could help Apple regain users in China, challenges remain.
“Apple faces a much more challenging competitive landscape in China, especially amid Huawei’s strong resurgence. Relying solely on AI services may not be enough to turn the tide,” he said.
Once a dominant force in China’s high-end smartphone market, Apple has seen its market share decline. In 2023, Apple led with 19% market share, but by 2024, Huawei had overtaken it with 16%, compared to Apple’s 15%.
News of the partnership has boosted Alibaba’s investor confidence, with its Hong Kong-listed shares surging over 40% since reaching a two-year low in January.
Meanwhile, competition in the AI industry continues to heat up. Shortly after Chinese startup DeepSeek unveiled an AI model in January, Alibaba introduced the latest version of its Qwen AI model, claiming it outperformed its competitor’s R1 model.
Speaking via video at the same event, Elon Musk announced that the next generation of his company xAI’s large language model, Grok 3, would launch within one to two weeks.
“In the tests that we’ve done thus far, Grok 3 is outperforming anything that’s been released, that we’re aware of,” Musk said.
Musk founded xAI to rival OpenAI, the company he co-founded, along with other AI leaders like Google.
