DeepSeek Got The Spotlight, Alibaba Won Apple's AI Business
ANKARA, TURKIYE - JUNE 10: In this photo illustration, the 'Apple' logo is displayed on a mobile ... [+] phone screen in front of a computer screen displaying Apple Intelligence logo in Ankara, Turkiye on June 10, 2024. (Photo by Hakan Nural/Anadolu via Getty Images)
Anadolu via Getty ImagesIt’s official: Apple has picked Alibaba over DeepSeek to roll out its AI-powered suite of services for the iPhone in China — a move designed to counter declining sales in the world’s largest phone markets.
“They talked to a number of companies in China. In the end they chose to do business with us," Alibaba chairman Joseph Tsai said at World Government Summit in Dubai, according to Reuters. “They want to use our AI to power their phones. We feel extremely honoured to do business with a great company like Apple.”
Among these companies were Baidu, Tencent, TikTok parent ByteDance and DeepSeek, which made waves with its high-performance, low-consumption ChatGPT competitor that was trained at a fraction of the cost of OpenAI’s model.
The collaboration aims to provide technology for the iPhone-maker’s Apple Intelligence service.
Baidu — previously thought to have been the front-runner for the Apple Intelligence partnership — didn’t make the cut as its models didn’t meet Apple’s standards and needs, according to The Information. Still, the two companies purportedly continue to work on other AI projects.
Despite being in the running, Apple is rumored to have ultimately decided against DeepSeek because it lacked the workforce and experience to handle an operation of the scale required for the iPhone.
The stakes to deliver a compelling Apple Intelligence experience to Chinese consumers are high, with Apple counting on its AI offering to recoup lost ground to competitors like Huawei.
For reference, iPhone sales in China sunk 11% year-over-year.
Shunning DeepSeek in favor of Alibaba is a prudent, but smart move by Apple.
Consumer-facing AI products require regulatory approval in China, so partnering with a company with the magnitude and know-how of Alibaba makes sense. Apple and Alibaba have both reportedly already filed for regulatory approval.
Although DeepSeek has been popular with consumers in the West, it has been besieged by a litany of security and regulatory hiccups.
In the stretch of two weeks, the Chinese AI developer has been pulled from app stores in Italy, banned from government devices in the U.S. and shown to suffer from glaring security hazards.
Sure, DeepSeek is still in the spotlight, but Alibaba won the prize that counts: Apple’s AI business.
