(Bloomberg) — Apple Inc.’s iPhones will use Alibaba Group Holding Ltd.’s AI technology, the Chinese firm’s chairman said, affirming reports the e-commerce pioneer had scored a coveted role in helping power the iPhone in the world’s top mobile arena.
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Joseph Tsai’s comments came after his company’s shares rose to a 2022 high in Hong Kong following a report about the partnership between the two leading tech firms. The stock, which had risen as much as 9.2% on Thursday, pared much of its gains after Tsai’s comments.
A local partner could help revive iPhone sales in China, which have suffered as rivals such as Huawei Technologies Co. move ahead with AI-enabled smartphones. Apple has yet to provide its full suite of AI features in China because of regulations that require it to partner with a locally accredited company. Tsai expects that to be the case for the long term, but didn’t specify if Alibaba would be the exclusive AI provider for Apple.
For Alibaba, securing Apple’s endorsement marks a win in the highly competitive domestic AI market. On Thursday, Baidu Inc. announced it was making its flagship AI chatbot free, making its own foray to grab a larger slice of the market.
“Apple has been very selective. They talked to a number of companies in China, and in the end they choose to do business with us,” Tsai told Jeffrey Katzenberg during an interview at the World Government Summit in Dubai. “They want to use our AI to power their phones.”
The iPhone maker has yet to officially unveil a long-term partner for its AI offerings in the country, after signing a landmark deal with OpenAI to integrate ChatGPT into iPhones internationally.
China is Apple’s most important market after the US, the biggest market for smartphones, computing and artificial intelligence. But it reported an 11% decline in revenue from China over the holiday quarter, in part because it’s struggling to fend off Huawei and other rivals. Representatives for the company didn’t respond to requests for comment.
Alibaba’s win comes at a pivotal moment for Chinese AI and the company in particular, which gained more than $80 billion of market value in 2025 following a turbulent few years.
It marks a surprise reversal of fortunes for a once-dominant internet leader that fell out of favor among investors during Beijing’s clampdown on tech behemoths and a post-Covid consumption slump. Behind the rally is optimism about Alibaba’s efforts to develop its own AI services and platform, which gained traction after AI startup DeepSeek unveiled technologies that caused a rout on Wall Street.
