A view of Alibaba's office in Shanghai, January 16. /VCG

Apple is partnering with Alibaba to roll out artificial intelligence features for iPhone users in China, Reuters reported on Tuesday, citing a report by The Information. The companies have submitted the Chinese AI features they co-developed for approval by China's cyberspace regulator, the report said.

Alibaba's Hong Kong-listed shares climbed 8 percent to 113.3 Hong Kong dollars at closing on Wednesday, while Apple's stock gained 2 percent as of the previous trading day.

Apple had selected Baidu as its main partner last year, but the Chinese company's progress in developing models for Apple Intelligence fell short of its standards, the report claimed.

After that, Apple considered models developed by Tencent, TikTok-parent ByteDance, Alibaba and Deepseek, but it passed on Deepseek as the startup's team lacked the manpower and experience needed to support a large customer, the report said.

Apple and Alibaba did not immediately respond to Reuters' requests for comment.

Rolling out the tools is crucial as iPhone sales dipped in the holiday quarter – usually Apple's biggest period of sales – due to a lack of AI features that were meant to be the chief selling point of its latest devices.

The company has forecast strong sales growth in the current quarter, fanning hopes that iPhone demand will rebound.

The Information's report added that Apple's decision to go with Alibaba was partly driven by the vast troves of personal data the e-commerce giant has on users' shopping and payment habits, which could help it train models and deliver more customized services.

(With input from Reuters)