Apple Inc. AAPL executive Craig Federighi suggested that the company is working on a way to introduce its AI technology, Apple Intelligence, in China, despite the country’s stringent regulations.
What Happened: Federighi, Apple’s senior vice president of software engineering, hinted at the company’s plans to navigate China’s strict AI model regulations during an interview with Fast Company.
He acknowledged the challenges posed by the regulations but confirmed that Apple has initiated the process to bring its AI capabilities to China.
“We certainly want to find a way to bring all of our best product capabilities to all of our customers,” Federighi said. “In some regions of the world, there are regulations that need to be worked through.”
China is Apple’s second-largest market, making it a crucial region for the company. The country’s strict regulations on AI models, particularly those developed by non-Chinese companies, have posed challenges for tech giants like Apple.
Rivals like Samsung Electronics Co Ltd. and Lenovo have joined forces with Baidu Inc. BIDU to offer AI-powered features to their users in China.
One of the reasons behind Apple’s challenge in bringing its AI features to China is the fact that ChatGPT is banned in the country. Apple partnered with Microsoft Corp.-backed OpenAI to integrate ChatGPT into iOS 18, iPadOS 18, and macOS 15 Sequoia. It lets Apple customers use OpenAI's technology for AI writing summaries across its operating systems.
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Why It Matters: The move to bring AI capabilities to China aligns with Apple’s efforts to maintain its foothold in the competitive Chinese market.
In a recent earnings call, Apple CEO Tim Cook described China as “the most competitive market in the world,” acknowledging the challenges faced by the company in the region. Cook’s statement came after a decline in iPhone sales in China, which was attributed to a drop in demand and fierce competition from local companies like Huawei Technologies.
Apple’s efforts to introduce AI in China come amid a challenging period for the company in the region. In the first quarter of 2024, Apple faced a 19.1% drop in iPhone sales in China, its worst performance since 2020.
Despite this, Cook’s visit to China in March was seen as a clear message of Apple’s commitment to the Chinese market.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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