Apple’s plan to bring more AI features to iPhones in China now has a confirmed local partner: Alibaba. The move is about more than software. It sits at the center of Apple’s effort to revive iPhone momentum in a market where sales pressure, domestic competition, and regulatory approval all matter.
Why the Alibaba Partnership Matters
Alibaba confirmed on Thursday that it has partnered with Apple on AI features for iPhones sold in China. Alibaba chairperson Joseph Tsai discussed the relationship during Dubai’s World Government Summit, making public what recent reports had already suggested.
Tsai said Apple evaluated several possible partners before choosing Alibaba. His comments made clear that Apple was looking for a China-based AI provider, not simply adding another vendor to a global rollout.
Apple “talked to a number of companies in China,” Alibaba chairperson Joseph Tsai said Thursday during Dubai’s World Government Summit. “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.”
For Apple, the partnership offers a route to bring AI features to a version of the iPhone experience that can work in China. For Alibaba, it places its AI technology inside one of the most closely watched consumer device platforms in the market.
The Sales Pressure Behind the Deal
The timing is important because Apple is dealing with a sharp slowdown in China. The iPhone saw an 11% year-over-year drop in China, according to Apple’s most recent earnings report.
Apple CEO Tim Cook has pointed to the absence of Apple Intelligence, the company’s in-house generative AI solution, as one reason international sales have been weaker. Ahead of Apple’s most recent earnings call, Cook told CNBC that the company saw a difference between markets where Apple Intelligence was available and markets where it was not.
“During the December quarter, we saw that in markets where we had rolled out Apple Intelligence, that the year-over-year performance on the iPhone 16 family was stronger than those markets where we had not rolled out Apple intelligence,” the executive told CNBC.
That framing explains why AI availability is now tied closely to iPhone demand. Apple has been counting on Apple Intelligence to support the next major iPhone “super cycle,” a term used for a dramatic rise in device sales. But the company’s pace and approach in rolling out its own generative AI solution has held back growth while Google continues bringing Gemini features to Samsung phones, Pixel devices, and other Android offerings.
Why Local AI Partners Are Central in China
Apple’s need for a local AI partner is not only commercial. These partnerships are important for U.S. companies seeking regulatory approval in China. According to the source article, both Alibaba and Apple have reportedly submitted relevant materials to local authorities.
Before settling on Alibaba, Apple was linked to other possible AI partnerships in China. Reports said an earlier deal with China’s Baidu ran into problems adapting Baidu’s AI offering. Apple is also believed to have explored partnerships with ByteDance and DeepSeek.
That sequence shows how narrow the path can be. Apple needs AI features that support its broader iPhone strategy, but it also needs an implementation that can move through China’s approval process. Choosing Alibaba gives Apple a major domestic technology partner at a moment when the company is trying to close a feature gap in the market.
Domestic Competition Has Shifted the Market
AI is only one part of Apple’s China challenge. Domestic smartphone makers have gained ground, and the fourth quarter of last year showed how much the market had changed.
According to figures from research firm Canalys, Vivo led the market in the fourth quarter of last year with 17%. Huawei grew shipments 37% year over year and took second place with 16% market share. Apple, which had 24% of the market the same time last year, fell to 15%.
That put Apple in a third-place dead heat with Xiaomi and Oppo. The numbers show that Apple is not simply trying to add AI features for parity with global rivals. It is also trying to defend its position against Chinese brands that are already performing strongly at home.
The Alibaba deal could help Apple address one missing piece of the iPhone value proposition in China. Still, stronger AI features alone do not erase the pressure from Vivo, Huawei, Xiaomi, and Oppo.
What Remains Uncertain
Even if the Alibaba partnership passes regulatory scrutiny, Apple’s path in China remains uncertain. Tariffs and trade tensions are likely to further affect sales in the market.
The company has also been moving closer to Donald Trump during the president’s second term. Cook donated $1 million to Trump’s inaugural committee in January. More recently, Apple followed Google’s lead by changing the name of the Gulf of Mexico to the Gulf of America on its Maps app.
For now, the confirmed Alibaba deal gives Apple a clearer answer to one major question: how it plans to bring AI features to iPhones sold in China. The larger question is whether that will be enough to restore momentum in a market where Apple is facing weaker sales, faster local competitors, and a complicated political and regulatory environment.
TechCrunch has reached out to Apple for additional comment on the Alibaba deal.