China’s regulator has suspended approval of Apple’s artificial intelligence services developed in partnership with Alibaba, amid growing tensions between the US and China over the Trump administration’s trade policies.
Apple and Alibaba had planned to introduce a suite of Apple Intelligence services powered by Alibaba’s AI models to Chinese users. However, the Cyberspace Administration of China (CAC) has suspended its review of the application. The Financial Times reports that the reason is growing geopolitical tensions between Washington and Beijing.
Apple is directly affected by the deteriorating relations between the two countries. Despite Tim Cook’s efforts to mend fences with the Trump administration, the company has come under pressure as the president pushes for manufacturing to move from China to the U.S., threatening 25 percent tariffs on Apple and Samsung devices.
The delays in the launch of AI services further exacerbate Apple’s problems, which are already losing market share in China. According to IDC, Apple’s share of the premium segment of the Chinese market fell from 70% at the beginning of 2023 to 47% in the first quarter of this year. Huawei, by contrast, increased its share from 13% to 35%.
It is noted that CAC approval is required for all foreign companies offering AI services in China, and requires mandatory testing of all models before their launch. Although Apple is partnering with Chinese company Alibaba to speed up the process, the high level of attention to the partnership of tech giants has only increased the scrutiny. In addition, according to information circulating in business circles, the PRC authorities are also using regulatory measures as leverage in trade negotiations with the United States. The final decision should be made by the State Council of the PRC, which is simultaneously negotiating with the United States on reducing tariffs.
The US Commerce Department’s Bureau of Industry and Security has also expressed concern about Apple and Alibaba’s cooperation. However, US authorities do not have legal tools to block this partnership.
Earlier, Alibaba Chairman Joe Tsai confirmed that the company would provide technology for iPhone AI features in China. Apple declined to comment. Alibaba, the CAC and China’s State Council did not respond to inquiries.