Apple will partner with Alibaba to offer AI features in China, the Chinese company's chairman said on Thursday, resolving months of speculation around Apple's strategy in the region.

"They talked to a number of companies in China," said Joe Tsai at the World Government Summit in Dubai. "In the end they chose to do business with us. They want to use our AI to power their phones. We feel extremely honoured to do business with a great company like Apple."

Alibaba stocks surged as much as 8.6% on a report by The Information that Apple is working with the e-commerce giant to roll out AI features in China. Apple has not yet rolled out its full suite of AI features in the country because of regulations that require it to partner with a local company

Apple devices outside of the country use a combination of proprietary Apple Intelligence and OpenAI's ChatGPT to provide AI features. The Information reports that both Alibaba and Apple have already submitted materials to authorities for approval.

Today's development follows news earlier in the week that Apple "passed over" the Chinese AI company DeepSeek, which recently made waves in the industry for being developed at a significantly lower cost than rivals. Today's report says that Apple initially considered Baidu as its primary AI partner last year, but its AI models did not meet Apple's requirements.

The AI partnership comes at a crucial time for Apple, which faced a significant setback in China in 2024, relinquishing its position as the country's top smartphone vendor. According to market research firm Canalys, Apple's annual shipments in the country declined by 17%, creating an opportunity for domestic manufacturer Vivo to take the lead.

Source: Macrumors