Alibaba pairs with Apple to develop AI features for China iPhones: sources
The US tech giant wants Alibaba’s Qwen AI model to make up for loss of Apple Intelligence on its iPhones in China
China’s Alibaba Group Holding has entered a partnership with US consumer electronics giant Apple to develop AI features for iPhones in China in a sign of the growing recognition of Alibaba’s capabilities on the fast-moving AI front, sources familiar with the matter said.
According to people close to the deal, Apple has decided to work with Alibaba as it sees the strength of the Chinese company’s Qwen AI model and its “cutting edge” capabilities.
The news was first reported by US tech industry publication The Information. Alibaba owns the South China Morning Post.
The deal comes as Apple is seeking to secure a local AI partner to boost sales of iPhones on the mainland, where the US company is facing a challenge in the world’s largest smartphone market because its Apple Intelligence capability is unavailable to iPhone users.
01:20
China’s Alibaba releases new AI model, said to outperform competitors Deepseek and OpenAI’s GPT-4o
“The partnership between Alibaba and Apple partially validates Alibaba’s capabilities in AI and Qwen 2.5 Max because selecting the right partner to deliver a good Apple Intelligence experience will help them reinvigorate iPhone sales in China”, said Morningstar’s senior equity analyst Chelsey Lam. “While details of the commercial arrangement between both parties remain unknown, the most significant outcome of this development is that it allows [Alibaba] to lay down the marker by having Apple as a flagship partner, and we could potentially see more companies express their interest in partnering with Alibaba.”