Apple Signs China AI Partnership with Baidu, But Keeps its Options Open

When it comes to China’s AI market, Apple is playing the field.

On Thursday, Joe Tsai, chair of Chinese tech giant Alibaba, confirmed reports that the company had reached a deal with Apple to integrate its AI into iPhones in China. Apple has already rolled out a suite of AI features called Apple Intelligence in markets outside China, but needed a domestic partner in order to roll them out in the Middle Kingdom. Behind the scenes, The Information reported, Apple is still talking to rival Chinese tech giant Baidu.

Slow But Steady

Out of its Silicon Valley compatriots, Apple has always been the company with the most access to the Chinese market, managing to get its hardware and software beyond the so-called Great Firewall. Apple was slow to hop on the AI bandwagon, and its rollout hasn’t been without its hiccups — last month, news publishers were irate after its AI summary bot sent fictitious headlines to iPhone users — but while the company might not have first-mover advantage in western markets, in China it has a headstart on other Silicon Valley giants. 

However, Apple also faces fierce competition in China, where its market share has been eroded by Chinese phone firms like Huawei, which already has ties to China’s AI wunderkind DeepSeek. The Information’s report suggests Apple is spreading its bets on AI partnerships, and it’s not just doing that in China:

• In non-China markets, Apple’s AI tools are built using OpenAI’s ChatGPT, which is blocked in China. In March last year, Bloomberg reported that Apple was also chatting up Google to let it integrate Google’s Gemini into the iPhone.
• Per The Information, Apple’s conversations with Baidu are about an AI search feature and building AI capabilities into Siri.

The success of DeepSeek hasn’t just galvanized China’s AI sector, it has also propelled the country’s markets generally into a rally. Per a BBC report, a cohort of people is using DeepSeek like a personal therapist. One user told the BBC that DeepSeek is capable of much more poetic and creative responses than rival home-grown apps.

Frosty Special Relationship: While Apple is enjoying a rare win in China (its share price ticked up by as much as 1.8% on the Alibaba news) it’s having a bit of a struggle with one of America’s allies. The Washington Post reported last week that the UK government is trying to force Apple to create a technical backdoor that would allow it to break its encryption on private messages. It’s a move that Apple has long resisted, arguing that it’s not possible to create a backdoor without also making itself vulnerable to hackers, authoritarian states, and pretty much anyone with a vested interest in snooping on anyone else. US lawmakers said on Thursday, per The Post, that the UK’s order to Apple could endanger Americans’ privacy, and want National Intelligence Director Tulsi Gabbard to make the Brits back off.