Apple is reportedly in discussions with Tencent and ByteDance to integrate their artificial intelligence models into iPhones sold in China.
The move comes as the company aims to navigate China’s strict regulatory landscape for generative AI services, which require government approval before public release.
These talks highlight Apple’s attempt to maintain its competitive edge in the world’s largest smartphone market, where it faces mounting pressure from domestic rivals like Huawei.
The integration of local AI models could play a crucial role in reversing its declining market share.
Why Apple needs local AI for China
The absence of generative AI features, such as OpenAI’s ChatGPT, in Apple devices sold in China has created a competitive disadvantage.
Regulatory requirements prohibit the use of unapproved foreign AI models, forcing Apple to seek partnerships with domestic tech giants.
Tencent’s Hunyuan and ByteDance’s Doubao are among the large language models being considered.
While Apple has already started rolling out OpenAI’s ChatGPT through its Apple Intelligence platform in other markets, integrating AI capabilities in China presents unique challenges.
Sources familiar with the matter told news agency Reuters that discussions with Tencent and ByteDance are still at an early stage.
Notably, ByteDance declined to comment, and Apple and Tencent have not responded to requests for clarification.
Apple has also reportedly been in talks with Baidu (9888.HK) about incorporating its Ernie AI model.
These discussions have faced setbacks due to technical issues and disagreements over data usage, particularly concerns about training AI on iPhone user data.
Chinese market’s smartphone competition
China’s smartphone market has grown increasingly competitive, with domestic players like Huawei gaining ground.
Huawei’s latest flagship devices have significantly dented Apple’s sales in the region.
According to industry analysts, Apple’s lack of advanced AI capabilities in its latest iPhones is one of the reasons it has lost market share.
By collaborating with local firms such as Tencent and ByteDance, Apple could address this shortfall.
A successful partnership could provide these domestic companies with a substantial boost in China’s rapidly evolving AI landscape.
Over 70 large language models have already been launched by Chinese tech firms and startups, making the field both crowded and competitive.
Despite Apple’s ongoing efforts, challenges persist. China’s regulatory environment remains stringent, and local partnerships carry inherent risks, including data privacy concerns and technological integration hurdles.
The stakes are high for Apple, as failing to innovate within these constraints could exacerbate its declining position in the Chinese market.
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