Apple has chosen to collaborate with Alibaba to enhance AI features specifically tailored for Chinese iPhone users.

On February 11, Samsung unveiled its latest smartphone, the Galaxy S25, in partnership with China's Wisdom Spectrum AI. In a swift response, Apple, its long-standing rival, announced later that evening that it had selected Alibaba as its AI partner in China.

According to The Information, a foreign media outlet, citing sources close to the matter, Apple selected Alibaba from among several leading Chinese AI companies to develop AI features tailored to the needs of Chinese iPhone users.

Since 2023, Apple has been testing models from various Chinese AI developers. At one point, it chose Baidu as its primary partner. However, due to Baidu's slow progress in developing models for "Apple Intelligence," the collaboration could not be sustained.

Subsequently, Apple evaluated several potential partners, including Tencent, ByteDance, Alibaba, and DeepSeek. Sources indicated that Apple ultimately decided against continuing its collaboration with DeepSeek due to the team's insufficient manpower and experience in supporting large-scale clients.

Ultimately, Alibaba's AI capabilities caught Apple's eye.

In 2023, Alibaba launched its independently developed Tongyi Qianwen large language model and Tongyi App. After continuous iterations, the flagship model Qwen 2.5-Max has excelled in multiple international benchmarks, demonstrating comprehensive capabilities comparable to or even surpassing some of the top global models.

Furthermore, over the past year, the cost of Tongyi Qianwen API calls has dropped by 97%, with over 300,000 enterprises utilizing it. In terms of open-source contributions, the Hugging Face community has created over 80,000 derivative models based on the "Tongyi" model, second only to Meta's Llama series. Alibaba's AI model community, "ModelScope," offers over 15,000 high-quality models with over 100 million downloads.

In contrast, Apple has faced stiff competition from domestic brands like Huawei and vivo in the Chinese market in recent years. The latest financial report reveals that Apple's revenue in Greater China fell by 7.7% year-on-year for fiscal year 2024, with an even steeper drop of 11% in the fourth quarter. Apple CEO Tim Cook acknowledged that the lack of AI features on the iPhone is a significant factor contributing to the decline in sales.

By partnering with Alibaba on AI, Apple aims to reverse the continuous decline in sales in the Chinese market by offering more appealing localized software features, thereby enhancing the iPhone's competitiveness in the domestic market.

Following the announcement, Alibaba's US shares surged. On February 11, Alibaba's US stock price jumped by up to 3%, and Apple's stock price also rose by 1.5% simultaneously. The next day, Alibaba's Hong Kong stock price continued to climb, with intraday gains exceeding 8%. Additionally, several of Alibaba's concept stocks also posted gains.

Currently, the AI features to be jointly developed by Apple and Alibaba have been submitted for approval by relevant departments. If approved, the feature is anticipated to be rolled out to Chinese users through iOS 18.5 in May this year.