Alibaba chairman Joe Tsai confirmed today that the e-commerce giant is partnering with Apple to develop AI features for iPhones sold in China. Speaking at the World Governments Summit in Dubai, Tsai revealed that Apple chose Alibaba after considering several Chinese companies for the collaboration.

"Apple wants to use our AI to power their phones," Tsai stated, highlighting the significance of the partnership. This move comes as Apple seeks to navigate China's strict regulatory framework surrounding AI technologies and regain ground in the competitive Chinese smartphone market.

The partnership addresses a notable gap in Apple's global AI strategy. While Apple Intelligence features have been available in other regions for several months, they have been conspicuously absent from iPhones in China. This absence has contributed to Apple's recent struggles in the Chinese market, where competitors like Huawei have gained an edge by offering advanced AI capabilities.

China's AI regulations pose unique challenges for foreign tech companies. The country requires large language models to obtain government approval before commercial use and holds AI providers accountable for removing content deemed "illegal" by authorities. By partnering with Alibaba, a leading Chinese tech company with its own AI models and voice assistants, Apple gains a valuable ally in navigating these complex regulatory waters.

The collaboration comes at a critical time for Apple in China. The company reported an 11% decline in revenue from the Greater China region in its most recent quarter, a drop that CEO Tim Cook partially attributed to the lack of Apple Intelligence availability in the country.

While specific details about the AI features remain undisclosed, the partnership signals Apple's commitment to tailoring its technology for the Chinese market. As Tsai noted, "Wherever you do business, you may want to have a localized AI that powers your devices." This approach could help Apple better compete with domestic rivals and potentially reverse its recent market share losses in China.

The news of the Apple-Alibaba partnership has already had a positive impact on Alibaba's stock, with shares rising 8.5% on Wednesday and an additional 3.3% in Thursday afternoon trading. As both companies prepare to bring AI-powered features to Chinese iPhones, the tech industry will be watching closely to see how this collaboration shapes the future of AI in one of the world's largest smartphone markets.