Prime Highlights: 

Apple has partnered with Alibaba to integrate AI into iPhones sold in China, announced by Alibaba Chairman Joe Tsai at the World Governments Summit. 

Tsai revealed that Apple chose Alibaba after exploring several options with Chinese companies to power AI features for iPhones. 

Key Background: 

Apple has officially partnered with Alibaba to integrate artificial intelligence (AI) into iPhones sold in China, according to Alibaba Chairman Joe Tsai, who announced the collaboration at the World Governments Summit in Dubai on Thursday, February 13. Tsai confirmed that Apple had explored partnerships with several companies in China before ultimately selecting Alibaba to power their AI features. As per the initial reports which surfaced earlier this week and led to a significant surge in the stock prices of both Alibaba and Apple. Alibaba’s Hong Kong-listed shares reached their highest levels since 2022 during Thursday’s trading session before stabilizing at a 2.5% increase. 

The strategic partnership is expected to enhance Apple’s position in the competitive Chinese smartphone market, where it faces increasing challenges from local competitors like Huawei, who have already integrated AI features into their devices. Despite this, Apple has been cautious about introducing its own AI features in China, particularly due to the country’s strict regulations surrounding AI technology. 

Apple’s broader AI initiative, known as Apple Intelligence aims to enhance its suite of devices with improvements to its voice assistant, Siri, as well as features designed to streamline tasks such as organizing emails and transcribing audio. However, China’s regulatory environment, which includes restrictions on large language models and generative AI technologies, has complicated Apple’s AI rollout in the country. 

Tsai highlighted that the Alibaba partnership will provide Apple with a local ally to navigate these regulatory challenges and effectively tailor its AI offerings to the Chinese market. Alibaba, a prominent player in China’s technology sector, has already developed its own large language models and voice assistants, positioning it as a strategic partner for Apple in this venture. This partnership marks a significant step for Apple in its efforts to compete with domestic rivals and strengthen its foothold in the world’s largest smartphone market.