Michelle ThompsonApple has partnered with Alibaba to introduce AI services in China, resolving months of speculation about its approach to the country’s mobile market.
Speaking at the World Governments Summit in Dubai, Alibaba Chairman Joe Tsai confirmed the collaboration, stating that Apple carefully evaluated multiple Chinese companies before selecting Alibaba’s AI technology to enhance its devices. However, he did not specify a release timeline or whether Alibaba would be Apple’s exclusive AI partner.
According to The Information, Apple also considered firms such as DeepSeek, Baidu, ByteDance, and Tencent before finalizing its decision. CNN has reached out to both companies for further details.
Apple’s AI service, Apple Intelligence, has so far been available only in select markets like the US, Canada, the UK, and Australia due to regulatory challenges in China. The country requires foreign AI providers to collaborate with local firms and obtain official approval.
Apple has been losing ground in China’s smartphone market to domestic brands like Huawei and Vivo. Lucas Zhong, an analyst at research firm Canalys, noted that while AI capabilities could attract more users, Apple still faces strong competition, particularly from Huawei’s resurgence.
Apple previously led China’s premium smartphone segment, but Huawei has gained momentum despite facing US trade restrictions since 2019. After initial setbacks, Huawei adapted by investing in innovation, culminating in the launch of the Mate 60 Pro in 2023, which triggered a US government inquiry. A mix of technological advancements and patriotic consumer sentiment has fueled Huawei’s rise.
By 2023, Apple held a 19% market share in China, while Huawei trailed at 12%. However, Huawei rebounded last year, surpassing Apple with 16% against Apple’s 15%, according to Canalys data.
The confirmed partnership has strengthened investor confidence in Alibaba, with its Hong Kong-listed shares climbing over 40% since hitting a two-year low in January.
Meanwhile, competition in AI remains fierce. Shortly after Chinese startup DeepSeek introduced a model that impressed Wall Street, Alibaba launched an upgraded version of its Qwen AI model, claiming it outperformed its rival’s R1 model.
Elon Musk, appearing via video at the same summit, announced that Grok 3, the next iteration of his xAI company’s language model, would be released within weeks. He claimed it would surpass all existing AI chatbots.
Musk founded xAI to compete with industry leaders like OpenAI and Google.
