Apple Focuses On Alibaba, Baidu Partnership In Race To Bring AI Features To China by Mid-2025

U.S.-listed Chinese stocks continue to gain steam after the country introduced DeepSeek and Alibaba Group Holding’s BABA affordable AI models.

Alibaba Chair Joseph Tsai confirmed to Bloomberg that Apple Inc AAPL iPhones will use Alibaba’s AI technology. Reportedly, Apple submitted AI features that were co-developed with Alibaba for China’s approval.

Also Read: Not Just DeepSeek, China’s AI Landscape Heats Up As Baidu Launches Free Ernie Bot

Apple’s move marks its focus on boosting its position in China, as the lack of Apple Intelligence capability in current iPhones in the country and government-incentivized local vendors have cost it its market share.

China also mandated that international companies collaborate with domestic companies as a primary partner, which prompted Apple to partner with Baidu Inc BIDU.

Apple continued its partnership with Baidu on AI features for the Chinese market, the Information reported.

Baidu is developing AI-based search features for Apple to enhance image and text processing and improve the Chinese-language Siri experience. Apple had initially considered Baidu to be its leading AI model partner, but it did not materialize.

Apple has also explored Tencent Holding TCEHY, ByteDance, and DeepSeek’s AI models. 

By 2028, Counterpoint expects most smartphones priced above $250 to be Generative AI-capable.

Apple’s China revenues have fallen for six consecutive quarters as competitors Huawei and Xiaomi XIACF XIACY have gained a market share. BofA Securities’ Wamsi Mohan expects Apple to regain its lost ground in China by launching Apple Intelligence.

China is Apple’s second-most important market after the U.S., and it is the biggest market for smartphones, computing, and artificial intelligence.

Apple is amid efforts to bring its AI features to China by the middle of 2025, Bloomberg reported, citing unnamed sources familiar with the matter.

The iPhone maker has teams in China and the U.S. working to acclimate its Apple Intelligence platform for the country, aiming for a launch by May.

Alibaba Group stock surged 63% in the last 12 months. Investors can gain exposure to Alibaba through Invesco Golden Dragon China ETF PGJ and ProShares Online Retail ETF ONLN.

Price Action: BABA stock is up 6.16% at $126.90 premarket at the last check Friday. BIDU is up 3.15%.

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