By Casey Hall
Shanghai (Reuters) -Alibaba will associate with Apple to support the supply of AI services of Iphones in China, said its president on Thursday, a decision likely to help the American company to facilitate the fall in sales of smartphones on its key market.
For Alibaba, the partnership is a major victory for the competitive AI market in China which houses Deepseek, which made the headlines this year with models developed at a fraction of the cost of Western rivals.
The historic agreement also resolves months of speculation on Apple’s strategy of Apple in the region, because the iPhone manufacturer had been in talks with leaders of Chinese technology, in particular Baidu, Bytedance and Tencent, Reuters and The information reported.
“They spoke to a number of companies in China. In the end, they chose to do business with us. They want to use our AI to feed their phones. We feel extremely honored to do business with a big A company like Apple, “Tsai at the World Government Summit in Dubai said.
While Apple’s phones outside China use a combination of its Proprietary Apple Intelligence and the Openai Chatgpt, Tsai did not specify whether the Alibaba partnership would follow a similar model.
In China, consumer -oriented AI products require regulatory approval and the information indicated above that Alibaba and Apple have already submitted documents to the authorities.
The actions listed in Hong Kong of Alibaba jumped up to 9.2% at $ 124.3 HK, their highest since January 2022. The action carried out gains to close 2.6%.
Apple did not immediately respond to a request for comments.
“Instead of seeing the Alibaba partnership to apply through the Lentile of the Force of Chinese AI, the partnership is mainly a recognition of the capacity of ALIBABA,” said Lian Jye SU, chief analyst of The OMDIA Technological Research Company.
Other analysts have said that the impact for Apple would depend on the speed at which it has deployed features in China.
“It will not be an easy fight, because local competitors have aggressively marketed their own AI features,” said Will Wong, analyst of the IDC research company.
Critical time
The integration of the AI comes at a critical time for Apple, which had to face the drop in iPhone sales in China in the middle of the growing competition of national competitors, in particular Huawei.
Industry analysts highlighted the absence of advanced AI features – a key sales argument in latest generation smartphones – as an important drawback for Apple on the Chinese market.
Apple underwent a notable setback in China in 2024, losing its crown as the first supplier of smartphones in the country. For its first tax quarter finished on December 28, Apple Greater China sales dived from 11% to 18.51 billion dollars.
