Apple has officially teamed up with Alibaba to integrate Apple Intelligence AI features into iPhones in China. This collaboration, confirmed by Alibaba Group chairman Joe Tsai, propelled Alibaba's stock price to its highest level in three years. To comply with the Chinese government’s preference for domestically developed AI, Apple Intelligence will operate on Alibaba’s Qwen model. This strategic move ensures that Apple’s AI features align with local regulations while delivering competitive AI capabilities to Chinese iPhone users.

Boosting Apple’s Performance in China 

The partnership marks a significant step forward for both Apple and Alibaba. Apple had previously cited the absence of Apple Intelligence in China as a key reason behind its weaker performance in the region last quarter. By integrating advanced AI capabilities, Apple aims to reclaim its top position in the Chinese smartphone market, where it currently ranks third.

Global Expansion of Apple Intelligence 

While the exact launch date of Apple Intelligence in China remains undisclosed, Apple is set to expand its AI-driven features to more European markets with the release of iOS 18.4 in April. Notably, Apple reported iPhone sales growth during the holiday season in regions where Apple Intelligence was already available, underscoring the competitive advantage of its AI features.

Alibaba Confirms the Deal 

Speaking at the World Governments Summit in Dubai, Joe Tsai publicly acknowledged the partnership, making it the first official confirmation of Apple’s collaboration with Alibaba. "Apple has been very selective. They engaged with multiple companies in China, and ultimately, they chose to partner with us," Tsai stated. He further emphasised that Apple is committed to localising AI on its devices to better cater to the Chinese market.