Apple Partners with Alibaba to Develop AI Features for Chinese Market  

#apple has entered into a partnership with Alibaba to develop AI features for iPhone users in China,reported by The Information.

The announcement led to a rise in pre-market shares for both Apple and Alibaba, while Baidu saw a decline. By market close, Apple’s stock had increased by 2%, Alibaba rose by 1.3%, and Baidu dropped by 4.7%.

This partnership is part of Apple’s broader strategy to offer more attractive software features in response to a decline in iPhone sales in China. Apple’s AI feature, Apple Intelligence, which combines Apple’s own AI models with OpenAI’s ChatGPT, was launched last year in the U.S. and other regions. The company plans to roll out a Simplified Chinese version by April.

China remains Apple's second-largest market, accounting for 15% of its sales. However, Apple has seen a decline in its market share, with a drop of 11% in Q4 2023 and a 7.7% decline in FY2024. The company faces increased competition from local Chinese brands and other challenges, such as the implementation of AI in its devices.

Apple initially worked with Baidu on AI model development but faced delays and setbacks, prompting the company to explore alternatives. After evaluating models from Tencent, ByteDance, Alibaba, and DeepSeek, Apple decided to continue the partnership with Alibaba.

Apple is hoping that this new AI collaboration will help address the sales pressure in China, where it continues to face significant competition.