Apple and Alibaba Collaborate to Train AI Model for Chinese Market

According to a report by Reuters, Apple Inc. (AAPL-US) is undergoing a significant strategic shift, developing a large language model for the Chinese market with the support of Alibaba (BABA-US) (09988-HK). This marks a transition in Apple's AI strategy in China, moving from complete reliance on domestic third-party partners to developing its own proprietary technology.

The development plan has led Apple to adopt a unique 'dual-track' AI deployment model in China. Apple is combining its proprietary technology with locally approved third-party systems. This approach not only gives Apple greater control over its AI products, ensuring a consistent user experience, but also helps meet China's strict local regulatory requirements.

The Chinese National Internet Information Office has already approved the relevant cooperation arrangements last month, clearing regulatory hurdles for 'Apple Intelligence' to enter the Chinese market. Under this framework, Alibaba's 'Qwen' model is expected to be integrated into the Chinese versions of iPhone, iPad, Mac, and Vision Pro devices' Apple Intelligence services. Additionally, Baidu's technology is also expected to be included.

Apple's proactive AI deployment is primarily due to the critical importance of the Chinese market to its revenue, but it is currently facing fierce competition from local brands like Huawei. These local competitors have quickly integrated AI functions into their smartphones, while the lack of Apple Intelligence in the Chinese version of the iPhone is believed to be a key factor in its sluggish sales and loss of market share.

Although Apple and Alibaba have not yet officially responded, Apple Intelligence is expected to be officially launched in China within the next few months with the iOS system update. Apple has already started testing some features, such as providing guidance to eligible Mac users on how to connect Qwen to Siri and the 'writing tool' function. Although this guide was later removed, it demonstrated the depth of cooperation between the two companies.

It is not yet entirely clear how Apple's independently trained model will work in conjunction with third-party systems from Alibaba, Baidu, and others.