Apple has partnered with Alibaba to bring Apple Intelligence AI functions to the iPhone in China.

Alibaba Group Chairman Joe Tsai confirmed the deal on Thursday at the World Government Summit in Dubai.

“Apple has been very selective,” he said. “They 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, so we’re very fortunate and extremely honoured to be able to do business with a great company like Apple.”

The partnership will see Apple Intelligence use Alibaba's Qwen models in China.

Also known as Tongyi Qianwen, the large-scale advanced language models (LLMs) developed by Alibaba Cloud are designed to achieve better performance in several fields, including text, vision, audio, coding and mathematics. They are pre-trained on large multilingual and multimodal datasets and are designed for real-world applications.

Using Alibaba's AI model, Apple aims to boost its AI functions in iPhones for the Chinese market by integrating new tools such as voice recognition, content recommendation, and photo editing.

iPhones outside China are currently equipped with Apple's proprietary intelligence and OpenAI's Chat GPT solutions.

Alibaba did not specify whether the deal remains exclusive or is open to other partnerships.

The Financial Times reported that Apple has tested models and discussed partnerships with many of China's leading artificial intelligence players, including Baidu, ByteDance, Moonshot, Zhipu, Tencent, and DeepSeek.

The deal aims to restore Apple's presence in the Chinese market after the company has faced significant challenges in recent times, facing increasing competition from domestic brands such as Huawei, Vivo, Oppo and Xiaomi, which have been quick to incorporate AI experiences into their competitively priced products.

This has led to a reduction in Apple's market share to 14 per cent in the second quarter of 2024, according to a report by market analysis firm Canalys.

Shares of Alibaba, listed in Hong Kong, jumped 9.2 per cent after the announcement, reaching their highest peak since January 2022.

Apple and Alibaba did not immediately respond to a request for comment.

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