Apple’s presentation on artificial intelligence this month offered examples of how American iPhone users could soon enjoy AI tools such as a custom emoji generator. No one mentioned China, the second-largest market for iPhones.
Apple’s presentation on artificial intelligence this month offered examples of how American iPhone users could soon enjoy AI tools such as a custom emoji generator. No one mentioned China, the second-largest market for iPhones.
There is good reason for the omission.
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There is good reason for the omission.
OpenAI’s ChatGPT and other Western AI models aren’t available in China, and that is prompting Apple to look for a Chinese partner to help offer its Apple Intelligence services, said people in the industry. So far, no deal has been announced, with the next iPhone model releases just months away.
In China, Apple is falling behind local rivals that have already incorporated AI functions into their phones. The iPhone dropped to third place by handset market share among smartphone brands in China in the first quarter of this year behind two local brands, according to Counterpoint Research.
Apple has held talks with several Chinese companies that make AI models including search-engine company Baidu, e-commerce leader Alibaba Group and a Beijing-based startup called Baichuan AI, people familiar with the matter said.
In the U.S., Apple is pursuing a two-pronged strategy to deliver AI services. It is building its own AI capabilities while also teaming up with OpenAI. Anticipation over Apple’s future AI-related offerings has helped push the company’s market capitalization back above $3 trillion.
In China, companies must seek Beijing’s approval before introducing AI chatbots built on large language models trained with huge databases of text, images and video vacuumed up from the internet and other sources. Regulators vet the models to ensure they don’t influence public opinion in a way the government doesn’t approve.
As of March, Beijing’s internet watchdog, the Cyberspace Administration of China, had approved 117 generative AI products, none of which is foreign-developed.
Early this year, Apple explored the possibility of obtaining approval for a foreign large language model to be used in its devices in China, but it found that Chinese regulators were unlikely to approve it, people familiar with the matter said. That realization prompted Apple to step up talks with potential local partners, they said.
Apple said the…