Apple had been working with Chinese tech goliath Alibaba to get its Apple Intelligence services off the ground in the People’s Republic. The deal would see Job’s Mob’s latest AI offerings run on Alibaba’s own models, giving iPhone users a taste of Cupertino-crafted smarts powered by Hangzhou hardware.
According to the FT, the joint project has already been sent for review by the Cyberspace Administration of China, but two insiders reckon it’s stuck in bureaucratic limbo. The CAC appears to be hesitating, citing rising political tension between Beijing and Washington as the culprit.
Apple has found itself in the firing line despite Tim Cook’s best attempts to brown-nose both sides. Trump has been leaning heavily on Job’s Mob to shift manufacturing back to the US. In May, he threatened to slap a 25 per cent tariff on Apple and Samsung gear unless production returned stateside.
The AI rollout delay is a fresh headache for Apple, which has already seen its share price knocked about by lacklustre AI launches and the threat of regulators sharpening their knives for its high-margin services business. Meanwhile, Huawei, Xiaomi, Oppo and Vivo are piling on the pressure in China’s smartphone space.
Apple’s tie-up with Alibaba was supposed to help win over the CAC, but even the local partnership hasn’t stopped the approval from becoming a political football. All AI models need a thumbs-up from the Chinese watchdog before going public, and while 300 domestic ones have made it through, Job’s Mob’s lot hasn’t.
One source familiar with the deal said any AI collaboration involving the US now takes longer to get past Chinese scrutiny, especially when it concerns something as strategic as generative AI. Final approval needs the nod from the State Council, which is knee-deep in ongoing tariff negotiations with the US.
There’s word that the US commerce department’s Bureau of Industry and Security has been sniffing around the Apple-Alibaba partnership, though it lacks the authority to stop it outright.
Alibaba chair Joe Tsai confirmed the collaboration in February, sending Alibaba’s shares skyward. He said the firm would supply the tech needed to support AI-ready iPhones sold in China.
But Job’s Mob is losing its grip on the premium smartphone market in the Middle Kingdom. Apple’s high-end market share in China plummeted from 70 per cent in early 2023 to 47 per cent in the first quarter of 2025. Huawei, meanwhile, jumped from 13 per cent to 35 per cent over the same period.
