Alibaba to provide AI for iPhone in world’s largest mobile market

Apple has entered into a historic partnership with Alibaba Group to implement artificial intelligence technologies in iPhones across China. This was announced by the Chinese company’s chairman Joseph Tsai at the World Government Summit in Dubai.

“Apple showed particular selectivity. They negotiated with several companies in China but ultimately decided to work with us,” Tsai emphasized in an interview with Jeffrey Katzenberg. “They want to use our AI to power their phones.”

This partnership could be key to restoring Apple’s position in the Chinese market, where the company has faced serious challenges. In the holiday quarter, the tech giant’s revenue in China fell by 11%, largely due to competition from Huawei and other local manufacturers offering smartphones with advanced AI features.

For Alibaba, this victory marks a triumphant return to the technology arena. In 2025, the company’s market capitalization grew by more than $80 billion after several turbulent years associated with Beijing’s regulatory pressure on tech giants and post-COVID consumption decline.

The news sparked a powerful response in the stock market: Alibaba shares in Hong Kong soared 9.2% to their highest since 2022. However, after Tsai’s comments, the growth somewhat slowed.

Importantly, Apple has not yet officially announced a long-term partner for its AI services in China, although the company previously signed a landmark agreement with OpenAI to integrate ChatGPT into iPhones in the international market. Chinese regulations require Apple to cooperate with a local accredited company to provide a full range of AI features.

Competition in the Chinese AI market continues to intensify. On the same day, Baidu announced free access to its flagship AI chatbot, aiming to increase its market share.

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