Alibaba Chairman and CEO Joe Tsai has confirmed that the Chinese company will cooperate with Apple on artificial intelligence features for iPhones and other devices in China. Tsai made the announcement at the World Government Summit, Reuters reports.
"They talked to a number of companies in China. 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," Tsai said.
This cooperation is very important for Alibaba because of the large number of iPhones in China and, in particular, because it chose their technology in a market that is highly saturated with AI companies. After the announcement of the cooperation, Alibaba shares rose by 9.2% to their highest level since January 2022.
The cooperation has probably already been going on for some time, as it was reported the day before that both companies had already submitted the first features for approval by Chinese regulators. Without permission from the Chinese government, it will be impossible to introduce artificial intelligence features on Chinese iPhones.
Further details of the new cooperation have not yet been disclosed. Apple Intelligence and OpenAI's ChatGPT integration are available for iPhone owners, but it is not yet known how AI functions will be implemented in China.
This deal is also important for Apple, as the company has been facing declining smartphone sales in China. Although AI features are driving demand for the new iPhones in other countries, Apple has been unable to distribute them in China because no major American language model has received government approval.
While the American company was looking for a partner for new AI functions, Chinese manufacturers such as vivo and Huawei seized the leadership in the smartphone market, pushing Apple to third place.