Apple (AAPL) and Alibaba (BABA) Join Forces to Bring AI to iPhones in China

Apple (NASDAQ:AAPL) is working with Alibaba (NYSE:BABA) to introduce AI-powered features to iPhones in China, according to a report from The Information.

The companies have submitted the AI capabilities for approval from China’s cyberspace regulator, though a launch timeline remains unclear. Apple had previously explored working with Baidu (BIDU), but the partnership stalled as Baidu’s AI models reportedly failed to meet Apple’s standards. Apple also considered collaborations with ByteDance (BNDCE), Tencent (TCEHY), and DeepSeek but ruled out DeepSeek due to a lack of resources and experience.

Alibaba Cloud’s Qwen team recently launched Qwen2.5-VL AI models, which offer text and image analysis similar to OpenAI’s Operator model. The technology has drawn praise from Citron Research, which sees strong enterprise potential. A successful AI rollout in China could help Apple regain momentum after iPhone revenue declined 1% year-over-year to $69.14 billion in its latest quarter. Apple CEO Tim Cook noted that demand for the iPhone 16 was stronger in markets where Apple Intelligence had already launched.

This article first appeared on GuruFocus.