Apple Inc (AAPL) has announced a new partnership with Alibaba to support iPhones’ AI services offering in China. The collaboration is a win for Alibaba in China’s AI market while helping Apple’s smartphone sales in the Chinese market.
Alibaba is an investment holding company mainly engaged in the provision of technology infrastructure and marketing platforms. Looking to expand its footprint in China, the move puts Alibaba a step ahead of AI competitor DeepSeekAI. For Apple, the iPhone maker has struggled in China recently. Therefore partnering with Alibaba resolves months of speculation over Apple’s AI strategy in the country.
Joseph Tsai, a Chairperson of the Alibaba group, spoke Thursday about the partnership. “They talked to a number of 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 honoured to do business with a great company like Apple,” Tsai said at the World Government Summit in Dubai.
How Will AI Partnership Affect Apple Stock?
While Apple’s phones outside China utilize a combination of its proprietary Apple Intelligence and OpenAI’s ChatGPT, Tsai did not specify whether the Alibaba partnership would follow a similar model. In China, consumer-facing AI products require regulatory approval. A report from The Information earlier says both Alibaba and Apple have already submitted materials to authorities.
Although not a chipmaker or language model developer, Apple’s reach and past success could allow AAPL stock to be one of the biggest gainers in the industry. Apple was certainly late to the party as far as AI goes. However, it has debuted its Apple Intelligence AI offerings in a recent upgrade. Although iPhone sales have been stagnating at a 1% year-over-year increase, especially in China, there is reason to believe an increase is ahead thanks to the Alibaba partnership.
Also Read: GameStop Prediction 2025: Will GME Bank On Crypto To Spark Stock Rally?
“Apple’s level of exposure to China is a risk relative to much of the rest of the market,” chief equity portfolio manager at Northwestern Mutual Wealth Management, Matt Stucky, told Bloomberg. Specifically, he noted that the company could be affected by a brewing trade war with the US.