Apple will integrate Alibaba’s AI into iPhones in China, Chairman Joe Tsai says

Alibaba Group Chairman Joe Tsai confirmed on Thursday that the company was partnering with Apple to roll out AI for iPhones sold in China. He was speaking 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 AI to power their phones,” Tsai said. 

The partnership was first reported by tech-focused news organization The Information on Tuesday, triggering a jump in Alibaba and Apple shares. 

Hong Kong-listed shares of Alibaba surged on Thursday to hit their highest level since 2022 during the intraday session before paring the gains, last up 2.5%.

The announcement could provide clarity on Apple’s AI strategy in China, helping it better tackle growing competition as the iPhone’s market share erodes in the world’s largest smartphone market. 

While domestic rivals such as Huawei have touted AI features on their devices since last year, Apple has been quiet about its ‘Apple Intelligence‘ push in the market, despite plans to launch in the U.S. this fall.

Apple Intelligence is the Cupertino-based company’s plan to bring AI across its devices, featuring an improved version of its voice assistant Siri, as well as features that automatically organize emails and transcribe and summarize audio.

Analysts have told CNBC that Apple’s AI rollout in China has likely stalled due to China’s stringent rules on the technology. 

Beijing has enacted various regulations on AI in recent years with some of the rules requiring large language models to get approval for commercial use. Generative AI providers are also responsible for taking down “illegal” content.

However, Tsai said Thursday that the Alibaba partnership could offer Apple a local partner to help it navigate the regulatory environment and localize its AI.

Alibaba is among China’s technology giants that have built their own large language models and voice assistants.

— CNBC’s Anniek Bao contributed to this report.