Alibaba’s (BABA) shares surged as the e-commerce giant made progress in its partnership with Apple to roll out artificial intelligence features in China.
Apple (AAPL) recently submitted Apple Intelligence features for China, developed with Alibaba, for approval by the country’s cyberspace regulator, a person familiar with the matter said. The review process could take months, the person said.
The news, earlier reported by The Information, sent Alibaba’s shares 7.8% higher to 113.10 Hong Kong dollars, equivalent to $14.53, on track for their biggest daily gain in almost two years.
Apple rolled out Apple Intelligence last year, a new AI tool which includes an improved Siri voice assistant as well as a variety of text-generation and photo-editing capabilities. Chinese regulators require Apple to work with local companies to develop the generative AI services it plans to release in the country.
Apple has been talking with major Chinese AI model providers since last spring. The iPhone maker was primarily working with Chinese search engine company Baidu until their collaboration ran into snags late last year, according to people familiar with the matter.
The partnership of the two companies could serve as an endorsement of Alibaba’s capabilities in AI, said Chelsey Tam, an analyst at Morningstar.
“It allows Alibaba to lay down the marker by having Apple as a flagship partner, and we could potentially see other companies expressing their interest in partnering with Alibaba,” Tam said.
In China, Apple has faced pressure from local rivals, such as Huawei, which sell phones with AI functions. Apple’s revenue from the Greater China region fell 11% in the quarter ended December, a drop that Chief Executive Tim Cook said was partly because Apple Intelligence wasn’t available in China.
Alibaba provides a conversational chatbot service, Qwen, and has released models ranked highly for their performance by global researchers in Chatbot Arena. It has also embedded AI models into its e-commerce services.
Apple didn’t immediately respond to a request for comment.
