Shares of Chinese e-commerce giant Alibaba surged in Hong Kong on Wednesday after The Information reported the company is working with Apple to introduce AI features to iPhones sold in China.
Dual-listed in New York and Hong Kong, the company’s shares rallied as much as 8.6% in the Asian financial hub. Citing one anonymous source, San Francisco-based business publication The Information said the two companies have submitted AI services they jointly developed for approval by Chinese regulators.
Apple partners with OpenAI to integrate the American tech giant’s ChatGPT into its Apple Intelligence software services, which were rolled out last year to provide iPhone users with more intelligent digital assistants. But as OpenAI’s chatbots aren’t readily available in China, where many western technology services are being blocked, Apple has been searching for a local partner for AI features in one of its most crucial markets.
Apple and Alibaba didn’t respond to requests for comment. Their partnership isn’t surprising, Chelsey Tam, a Hong Kong-based senior equity analyst at research firm Morningstar, wrote in an e-mailed note.
Gaming and social media giant Tencent, which was once considered by Apple, was placed earlier this year on a U.S. list of Chinese military-linked firms, which might discourage American companies from working with it, according to the note. TikTok parent ByteDance, another Chinese tech giant that is investing heavily in AI models, has yet to resolve the short video platform’s legal challenges in the U.S.
Meanwhile, collaboration with search engine operator Baidu failed as its AI reportedly didn’t meet Apple’s standards. Apple considered DeepSeek, the Chinese AI firm that shocked Silicon Valley with its cost-effective model, but reportedly concluded the startup lacked the manpower to support a large customer like itself.
Alibaba, on its part, recently released an AI model that it says is better than DeepSeek in some aspects. Charlie Chai, a Shanghai-based analyst at research firm 86Research, says by WeChat that the partnership with Apple is a “powerful endorsement,” and might lead to more companies working with Alibaba.
“Apple has done far more research than any investor,” he says. “So this vote of confidence from Apple is definitely taken very seriously by investors.”