Alibaba partners with Apple on AI for China iPhones

February 13, 2025 (MLN): Alibaba Chairman Joe Tsai said on Thursday the company will partner with Apple on AI for iPhones sold in the China market, sending the Hong Kong-listed shares of the Chinese tech giant soaring over 9% to a three-year high.

They talked to several companies in China.

In the end, they chose to do business with us.

They want to use our AI to power their phones.

We feel extremely honored to do business with a great company like Apple, Tsai said at the World Governments Summit in Dubai.

The Hong Kong-listed shares of Alibaba jumped as much as 9.2% to HK$124.3, their highest since January 2022.

Apple did not immediately respond to a request for comment, as Reuters reported.

The AI integration comes at a critical time for Apple, which has faced declining iPhone sales in China amid growing competition from domestic rivals, particularly Huawei.

Industry analysts have pointed to the absence of advanced AI features - a key selling point in latest-generation smartphones - as a significant disadvantage for Apple in the Chinese market.

Apple suffered a notable setback in China in 2024, losing its crown as the country's leading smartphone vendor.

According to market research firm Canalys, Apple's annual shipments in China fell 17%, allowing domestic manufacturers to surge ahead.

Vivo captured the largest market share at 17%, while Huawei secured second place with 16%, pushing Apple to third place with 15% of the market.

Alibaba has become a Chinese AI favorite among investors early in 2025, with its stock price up over 40% so far this year.

The firm in late January released a new version of its Qwen 2.5 artificial intelligence model whose functionality it said surpassed that of DeepSeek-V3, which caused a stir earlier this year for its capability and low cost.

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