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Alibaba’s Shares Soar After Investors Buy iPhone AI Hopes- It rises 8% after the Information reported headway in talks
- Apple is trying to secure a local partner to provide iPhone AI
By Bloomberg News
12 February 2025 at 10:03 GMT+8
Updated on
12 February 2025 at 10:47 GMT+8
Alibaba Group Holding Ltd.’s stock surged as much as 8.6% after the Information reported that Apple Inc. is working with the e-commerce pioneer to roll out artificial intelligence features in China.
The stock climbed its most since September after the tech outlet, citing one unidentified source, said Apple and Alibaba have submitted AI features for approval to China’s cyberspace regulator. Baidu Inc., long considered a rival candidate, slid almost 3% in Hong Kong.
Securing AI real estate on the iPhone would mark a breakthrough for Alibaba, whose latest models performed well in global benchmarks. Its stock is up more than 30% in 2025, buoyed by optimism that the company — which is struggling with flagging Chinese consumption — is making headway in efforts to develop AI services and platforms for the world’s biggest internet arena. Representatives for Alibaba and Baidu didn’t respond to requests for comment.
Alibaba could present a strong local partner to Apple, which on its part is fighting to revive sales in the country as rivals such as Huawei Technologies Co. move ahead with AI-enabled smartphones.
“Alibaba is the largest e-commerce player in China and therefore should have a treasure trove of data that Apple could look to leverage in delivering personalized GenAI features to Chinese consumer,” Morgan Stanley analyst Erik Woodring wrote. “We could also see a scenario where Apple creates an initial AI partnership with Alibaba that eventually expands to other local Chinese cloud players over time.”
A reports of an Apple-Alibaba tie-up has helped fuel a rally in Chinese tech. But Bloomberg Opinion’s Shuli Ren says that despite recent gains, fear is still the prevailing mood among Chinese equity investors.
The iPhone maker hasn’t yet unveiled a longer-term partner for its AI offerings in China, after signing a landmark deal with OpenAI to integrate ChatGPT into iPhones.
Apple Intelligence doesn’t currently work for iPhones bought in mainland China, where OpenAI has taken steps to block access. Regulators there require companies to obtain approval before they roll out generative AI services in the country, and so far no major US service has managed to win a nod from Beijing.
In January, Alibaba published benchmark scores showing its Qwen 2.5 Max edition scored better than Meta Platforms Inc.’s Llama and DeepSeek’s V3 model in various tests. The company is now considered a leading player in AI alongside big names from Tencent Holdings Ltd. to ByteDance Ltd. and startups including Minimax and Zhipu.
What Bloomberg Intelligence Says
An AI partnership with Apple in China, as reported by The Information, might enable Alibaba to tap into the more affluent iPhone-user base for higher payable fees, possibly boosting cloud revenue growth above consensus for 11% yearly gains starting in fiscal 2026. This may require Alibaba to cede profit gains in the next 12 months as it hikes research outlays and capital spending on related infrastructure.
- Catherine Lim and Trini Tan, analysts |
