Apple's iPhones will use AI from Alibaba for Chinese market: Report

Apple's iPhones in China will utilise Alibaba's AI technology due to local regulations.

Apple Inc.’s iPhones in China will use Alibaba Group Holding Ltd.’s artificial intelligence (AI) technology, Bloomberg reported, citing Alibaba's Chairman Joe Tsai.

Joseph Tsai, chairman of Alibaba Group Holding Ltd., during the Asia Financial Forum in Hong Kong, China, on Tuesday, Jan. 14, 2025. The forum runs through Jan. 14.(Lam Yik/Bloomberg)

This is because of regulations in China which require Apple to partner up with a locally accredited company.

As a result, Apple did not provide its full suite of AI features so far. This may change with the new collaboration.

“Apple has been very selective, they talked to a number of companies in China, and in the end they choose to do business with us, they want to use our AI to power their phones,” the report quoted Tsai as saying in an interview at the World Government Summit in Dubai.

This also confirms an earlier report about the Apple-Alibaba collaboration which initially ended up causing the Hangzhou-based company’s shares to rally as much as 9.2% in Hong Kong, according to the report.

Getting Apple as a customer also marks a significant win for Alibaba’s efforts to obtain a lead in the highly competitive Chinese domestic market.

It could benefit Apple too by reviving iPhone sales in China, which have suffered so far because of rivals like Huawei. China is Apple’s most important market after the US, but it reported a 11% decline in sales there.

Though this would a long term partnership, Tsai did not specify if Alibaba would be the exclusive AI provider for Apple.