Alibaba Group chairman Joe Tsai confirmed a strategic partnership with Apple at the World Governments Summit in Dubai, revealing that Alibaba's AI technology will integrate with Apple's devices in China. This collaboration marks a significant step for Apple as it aims to expand its 'Apple Intelligence' initiative, which includes an enhanced version of its voice assistant Siri and features that organize emails and transcribe audio. The Information first reported this partnership on Tuesday, triggering a surge in both Alibaba and Apple shares.
Apple has been relatively quiet about its 'Apple Intelligence' plans, despite intentions to launch the initiative in the U.S. this fall. The Cupertino-based company's vision involves embedding artificial intelligence across its devices to enhance user experience. However, Apple's rollout in China has faced challenges due to stringent regulations on AI technology, including Beijing's requirement for large language models to obtain approval for commercial use.
In this context, Alibaba's role is crucial. The Chinese tech giant will assist Apple in navigating the complex regulatory landscape and localizing its AI features for the Chinese market. Joe Tsai emphasized the significance of the partnership, stating:
"[Apple] talked to a number of companies in China, and in the end, they chose to do business with us. They want to use our AI to power their phones."
- Tsai
This collaboration not only offers clarity on Apple's AI strategy in China but also positions Apple to better compete in the world's largest smartphone market. Analysts suggest that Apple's previous efforts to implement AI in China likely stalled due to these regulatory hurdles. The partnership with Alibaba could potentially unlock new opportunities for Apple in this challenging environment.
Hong Kong-listed shares of Alibaba surged on Thursday, reaching their highest level since 2022 during the intraday session, closing up 2.5%. The news reflects investor optimism about the potential impact of this partnership on both companies.