Apple And Alibaba's AI Launch In China Delayed By US-China Trade Tensions And Regulatory Hurdles: Report

Apple Inc. AAPL and Alibaba Group Holding Ltd – ADR BABA are facing regulatory delays in launching their artificial intelligence partnership in China, as Beijing withholds approval amid complex U.S.-China trade dynamics.

What Happened: The tech giants submitted multiple AI products co-developed for Apple Intelligence services to China’s Cyberspace Administration this year, but applications remain stalled due to increasing geopolitical uncertainties, reported the Financial Times, citing sources.

Apple’s AI rollout delay comes as the company battles declining market share in China’s premium smartphone segment. International Data Corporation data shows Apple’s high-end market share dropped from 70% in early 2023 to 47% in the first quarter of 2025, while Huawei Technologies climbed from 13% to 35%.

The partnership represents Apple’s second attempt at AI integration in China after its collaboration with Baidu Inc. BIDU failed to meet expectations.

China requires international companies to partner with domestic firms for AI services, prompting Apple to team with Alibaba after exploring options including Tencent Holdings Ltd. TCEHY and ByteDance.

Apple and Alibaba did not immediately respond to Benzinga's request for comment.

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Why It Matters: President Donald Trump‘s trade policies have particularly impacted Apple, with threats of 25% tariffs on devices unless manufacturing returns to the U.S. Despite this pressure, Apple continues expanding its India operations through Foxconn with a $1.5 billion investment.

The CAC typically approves AI models through official testing and has cleared over 300 domestic models. However, US-related partnerships now face extended review periods requiring State Council approval, according to the report, which is engaged in ongoing trade negotiations.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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