Hajra Naz
Apple has formally joined up with Chinese tech giant Alibaba to present AI services in China, the world’s biggest mobile phone market. This decision ends months of speculation about Apple’s AI expansion in the country.
Apple’s Selective AI Partnership
Alibaba chairman Joe Tsai confirmed the collaboration during a speech at the World Governments Summit in Dubai.
Tsai said.
“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,”
However, he did not specify a timeline for the rollout or clarify whether Alibaba would be Apple’s exclusive AI partner.
Why Apple Chose Alibaba
According to The Information, Apple also explored partnerships with other Chinese AI firms, including DeepSeek, Baidu, ByteDance, and Tencent, before eventually selecting Alibaba. The partnership complies with China’s regulations, which require outside AI suppliers to collaborate with a nearby firm and get government endorsement.
Read More: Alibaba launches new AI version ‘better’ than DeepSeek
Apple’s Challenges in China
Apple’s AI development has so distant been constrained to select markets, including the U.S., Canada, the U.K., and Australia, due to regulatory concerns. In China, the company has been losing showcase share to residential rivals such as Huawei and Vivo.
Lucas Zhong, a research analyst at Canalys, noted that while AI services seem to offer assistance Apple draws in more Chinese clients, the competition remains furious.
Zhong said.
“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,”
Huawei’s Resurgence and Market Shift
Apple had dominated China’s high-end smartphone market for a long time until Huawei re-emerged as a solid competitor. The U.S. government’s exchange confinements on Huawei in 2019 at first harmed the company, but they eventually pushed Huawei to innovate.
The dispatch of Huawei’s Mate 60 Pro in 2023 impelled a U.S. government investigation and fueled nationalistic bolster for the brand in China.
Canalys data shows that in 2023, Apple held 19% of China’s versatile phone market, whereas Huawei had 12%. By 2024, Huawei’s share surged to 16%, overtaking Apple’s 15%.
Alibaba’s Stock Surge Following Apple Deal
News of Apple’s affirmed partnership with Alibaba has altogether boosted investor confidence. Since hitting a two-year low in January, Alibaba’s Hong Kong-listed offers have surged by more than 40%.
Competition in the AI Space
Alibaba’s latest AI model, Qwen, was unveiled shortly after Chinese startup DeepSeek introduced its AI model in January, which stunned industry analysts. Alibaba claims its Qwen model surpasses DeepSeek’s R1 model in performance.
Meanwhile, Elon Musk also made headlines at the World Governments Summit. Speaking via video, he announced that the next-generation AI model from his company, xAI, would be released within one to two weeks. Musk said.
“In the tests that we’ve done thus far, Grok 3 is outperforming anything that’s been released, that we’re aware of,”
Musk established xAI to compete with OpenAI, the company he co-founded, as well as AI giants like Google.
Read More: Chinese Startup DeepSeek AI Exceeds ChatGPT on Apple App Store
What’s Next?
Apple’s collaboration with Alibaba is a key move to comply with Chinese regulations while amplifying its AI presence in an essential market. In any case, with extending competition from Huawei and creating AI firms, Apple faces an intense battle to recover its dominance in China.
