Consumer electronics giant Apple (AAPL) plans to integrate artificial intelligence (A.I.) created by the Alibaba Group (BABA) into its iPhones that are sold within China.
Joe Tsai, who is chairman of Alibaba, one of China’s largest domestic technology companies, made the announcement at the World Governments Summit in Dubai.
“Apple talked to a number of companies in China, and in the end, they chose to do business with us. They want to use our A.I. to power their phones,” said Tsai.
The deal sheds some light on Apple’s A.I. strategy within China, helping it better tackle growing competition as the iPhone’s market share erodes in the Asian country.
While Chinese rivals such as Huawei have promoted their smartphone A.I. features since last year, Apple has been quiet about its “Apple Intelligence” push in the nation of 1.4 billion people.
In North America, Apple Intelligence is the company’s plan to cascade A.I. across its devices, featuring an improved version of its voice assistant Siri, as well as features that organize emails and transcribe audio recordings.
However, within China, Apple faces stringent rules on its technology given that it is a foreign U.S.-based company.
The Chinese government in Beijing has enacted regulations on A.I. with some of the rules requiring large language models to get approval for commercial use.
Generative A.I. providers are also responsible for taking down any content the Chinese government deems to be inappropriate.
Tsai said at the conference that the Alibaba partnership gives Apple a local partner to help it navigate the regulatory environment and localize its A.I. in the Chinese market.
Alibaba is among China’s leading A.I. companies and has built its own large language models.
Some analysts are speculating that Apple’s deal with Alibaba might draw interest and criticism from U.S. lawmakers and regulators who are increasingly worried about China’s A.I. advances.
The stock of Apple has increased 28% over the past 12 months to trade at $236.87 U.S. a share.
