Apple has teamed up with Chinese tech giant Alibaba to develop AI features for iPhones in China, sources familiar with the matter report. The partnership comes as Apple seeks to introduce its Apple Intelligence capabilities to the Chinese market, where regulatory challenges have previously hindered its rollout.

The collaboration leverages Alibaba's Qwen AI model, which Apple reportedly views as having "cutting edge" capabilities. By working with a local tech powerhouse, Apple aims to navigate China's strict AI regulations and potentially boost its smartphone sales in a market where it has faced recent challenges.

This move follows Apple's failed attempts to partner with other Chinese tech firms. Talks with Baidu reportedly broke down due to privacy concerns and inadequate responses to typical iPhone user queries. Subsequent discussions with Tencent and ByteDance also proved unsuccessful, leading Apple to settle on Alibaba as its AI partner of choice.

"Apple has decided to work with Alibaba as it sees the strength of the Chinese company's Qwen AI model and its 'cutting edge' capabilities."— Source close to the deal

The timing of this partnership is crucial for Apple, as the company has set an internal deadline to launch Apple Intelligence in simplified Chinese for users outside of China by April. While a release within China still requires regulatory approval, the development of a Chinese version marks a significant step towards that goal.

Alibaba's vast e-commerce data could prove valuable in training AI models to provide more personalized services to Chinese users. The two companies have reportedly submitted their co-developed AI features for regulatory approval, with hopes of integrating them into iPhones through a future iOS update.

As Apple faces increasing competition in the AI space, with rivals like Google and Microsoft rapidly advancing their own AI assistants, this partnership with Alibaba could help the Cupertino-based company maintain its foothold in the crucial Chinese market. The success of this collaboration may set a precedent for how global tech giants navigate complex regulatory environments to bring AI features to diverse markets.