Shares of Alibaba Group Holding Ltd. surged as much as 8.6% after reports emerged that Apple Inc. is collaborating with the Chinese e-commerce giant to introduce artificial intelligence (AI) features in the country. This marked the largest jump in Alibaba’s stock since September, fueled by news from The Information, which cited an unnamed source claiming that Apple and Alibaba have submitted AI-related features for approval to China’s cyberspace regulator. Meanwhile, rival Baidu Inc. saw its stock fall nearly 3% in Hong Kong following the news.
This partnership, if confirmed, would be a significant achievement for Alibaba, especially as it seeks to carve out a role in AI development amidst China’s highly competitive tech landscape. The company’s stock has already climbed more than 30% in 2025, driven by optimism surrounding its efforts to develop AI services and platforms, despite challenges posed by a slowdown in domestic consumption. Neither Alibaba nor Baidu responded to requests for comment on the partnership.
Strategic AI Partnership
Securing a foothold in AI integration on Apple’s iPhone would represent a major breakthrough for Alibaba. The company’s latest AI models, including the Qwen 2.5 Max edition, have received positive reviews and performed strongly in global benchmark tests, outpacing competitors such as Meta’s Llama and DeepSeek’s V3 model. Alibaba is now positioned as a leading AI player in China, alongside tech giants like Tencent and ByteDance, as well as emerging startups.
From Apple’s perspective, Alibaba presents a compelling local partner in China, where the company is struggling to regain market share against strong domestic competitors like Huawei Technologies Co., which has introduced AI-enabled smartphones. Morgan Stanley analyst Erik Woodring noted that Alibaba’s vast e-commerce ecosystem could provide Apple with valuable data to enhance personalized generative AI features for Chinese consumers.
“Alibaba is the largest e-commerce player in China and should have a treasure trove of data that Apple could leverage for personalized GenAI features,” Woodring said. “This could evolve into a broader AI partnership, eventually expanding to include other local Chinese cloud players.”
Regulatory Hurdles for AI Services in China
Apple has yet to announce a long-term partner for its AI offerings in China, despite signing a landmark deal with OpenAI to integrate ChatGPT into its iPhones. However, generative AI services like those provided by OpenAI face significant regulatory challenges in China. The country requires foreign companies to obtain government approval before launching such services, and so far, no major U.S.-based AI service has received approval.
In contrast, Alibaba has been able to navigate these regulatory waters, with its own AI models gaining traction in the Chinese market. This places the company in a unique position to support Apple’s ambitions in the region. However, the outcome of their collaboration is still subject to the approval of Chinese regulators, who have yet to grant clearance to any AI services from foreign companies.
The Future of AI in China
As both Apple and Alibaba work to leverage AI in China’s rapidly evolving tech landscape, the partnership between the two companies has the potential to reshape the competitive dynamics within the country’s AI industry. With Apple seeking a local ally in the face of fierce competition, and Alibaba emerging as a dominant player in AI, this collaboration could signal the beginning of a new era of AI-powered technology in China.
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