Alibaba confirms partnership with Apple on AI features

Alibaba Chairman Joe Tsai said on Thursday that the company will partner with Apple on AI for iPhones sold in the Chinese market, sending the Hong Kong-listed shares of the Chinese tech giant soaring over 9 percent to a three-year high.

"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 honored to do business with a great company like Apple," Tsai said at the World Governments Summit in Dubai.

The Hong Kong-listed shares of Alibaba jumped as much as 9.2 percent to HK$124.3 (about $15.96), their highest since January 2022.

The AI integration comes at a critical time for Apple, which has faced declining iPhone sales in China amid growing competition from domestic rivals, particularly Huawei.

Industry analysts have pointed to the absence of advanced AI features – a key selling point in latest-generation smartphones – as a significant disadvantage for Apple in the Chinese market.

Apple suffered a notable setback in China in 2024, losing its crown as the country's leading smartphone vendor.

According to market research firm Canalys, Apple's annual shipments in China fell 17 percent, allowing domestic manufacturers to surge ahead. Vivo captured the largest market share at 17 percent, while Huawei secured second place at 16 percent, pushing Apple to third place with 15 percent of the market.

Alibaba became a Chinese AI favorite among investors early in 2025, with its stock price up over 40 percent so far this year.

In late January, the firm released a new version of its Qwen 2.5 AI model, whose functionality it said surpassed that of DeepSeek-V3, which caused a stir earlier this year for its capability and low cost.