skyrocketed by 200 billion, and Apple pulled Ali

Almost two years after the rumors, Apple's AI partner in China has finally been finalized.

On February 13, at the "World Governments Summit 2025" summit held in Dubai, Alibaba Chairman Joe Tsai confirmed the news of Alibaba's cooperation with Apple.

"Apple needs a local partner in China to serve their phones. Apple has always been very picky, and they have spoken to several companies in China. Eventually, they chose to do business with us. ”

Affected by this good news, on February 13, Alibaba's Hong Kong stock rose more than 9% intraday, recording the largest one-day increase since November 11, 2022. Apple's stock price also rose 1.97% on the evening of February 13.

Since 2023, Apple has been looking for domestic AI partners, and has contacted almost all the leading AI companies in the market. According to various information, the list of participants in Apple's negotiation list not only includes Baidu, Tencent, Byte and other major manufacturers, but also representatives of the "AI Six Little Dragons" such as Zhipu, as well as DeepSeek, which has recently become popular all over the world during the Spring Festival.

In the field of AI, where "experts gather", why did Apple finally choose Ali?

▲ Tsai Chongxin, co-founder and chairman of the board of directors of Alibaba

01, why did you fall into Ali?

On the surface, Apple, with its deep pockets, should be the dominant party. However, according to the "Financial World" from all parties, Apple's negotiations, which lasted nearly two years, did not go smoothly. The core reason is that Apple has high requirements for partners, and there are not many companies that can adapt or are willing to adapt.

Ethan Qi, associate director of Counterpoint Research, told Caijing World that for Apple, its cooperation partners should not only be first-tier companies in the field of AI, but also consider the long-term nature of the cooperation, and the model needs to be ahead enough.

In 2024, there was news in the market that Baidu was finally selected. But in December, The Information revealed that when dealing with common questions raised by iPhone users, Baidu's large model showed a lack of understanding and inaccurate answers.

In addition to the technical challenges, Apple and Baidu also disagree on user privacy protection. Baidu wants to store and analyze data obtained from AI-related queries from iPhone users, and Apple's privacy policy prohibits the collection of such data.

In this round of competition around Apple, Byte, the parent company of Doubao App, which is the leader in terms of the number of users, Tencent, which owns the national-level application WeChat, and DeepSeek, which is popular, have also entered Apple's range one after another.

There is no reason for choosing bytes, Canalys research analyst Zhong Xiaolei told "Financial World" that because Ali has a more complete matrix model than bytes, "especially the small model of 0.5-3B, which is more suitable for device end-side operation". In addition, there are also geopolicy risks associated with Byte's cooperation with U.S. companies.

According to Caijing, in December 2024, Apple once approached Tencent and expressed its intention to formally cooperate, but in the end the cooperation could not be reached. The reasons are: first, the performance of Tencent's large model is not good enough, and Tencent's investment in AI technology is mainly for its own business such as games and social networking. As a result, many of Tencent's business units are equipped with AI teams. The core members of the hybrid model are not stable, which also affects the research and development progress of the large model.

Industry insiders also told "Financial World" that Tencent, Douyin, and Apple also have a 30% "Apple tax" commission dispute that has not been resolved. If AI cooperation is carried out, it is likely to involve the bargaining chips of the two sides in the subsequent negotiation on the "Apple tax". Ali has no conflict with Apple in the transaction of virtual goods.

According to media reports, Apple and DeepSeek have also discussed cooperation intentions, but ultimately believe that the DeepSeek team still lacks the manpower and experience to work with large customers.

Being able to understand user requests based on Apple's mobile phone data and having a large enough team to respond to development, Ali ended up almost becoming the only choice.

As an e-commerce giant, Alibaba has more than enough consumer personal data and analytics capabilities. In addition, "Alibaba's Tongyi Qianwen model can technically meet Apple's needs." Alibaba Cloud's resources also have enough computing power to better serve the hundreds of millions of iOS users in China. Ethan Qi said.

In fact, Ali Tongyi Qianwen's model ability has also withstood many tests in the past year.

On January 29, Alibaba Cloud released Qwen2.5-Max, the flagship model of Tongyi Qianwen. The model has more than 20 trillion tokens of pre-training data, and in the blind test list of the third-party benchmark platform Chatbot Arena, it surpassed DeepSeek-V3, OpenAI o1-mini and Claude-3.5-Sonnet models with 1332 points, ranking seventh in the world and becoming the champion of China's large models in the non-inference category.

In terms of providing cloud services, Alibaba Cloud is also among the best. In July 2024, Alibaba Cloud was ranked second in the world in terms of AI infrastructure service product strength in the global AI infrastructure solutions research report released by Forrester.

In November of the same year, Gartner released a report that Alibaba Cloud was selected as an emerging leader in the global generative AI field, ranking second in the world in terms of product features and future potential.

However, it is important to note that Apple's overseas cooperation with OpenAI is not exclusive. Therefore, while Apple cooperates with Alibaba, it is likely that it still retains the possibility of exploring local AI cooperation with other companies.

02, the AI mobile phone is really here this time

The announcement of Apple's biggest cooperation also means that Chinese users finally don't have to look far away with the iPhone's "Apple Intelligence" feature. Next, the end-to-end battle of AI mobile phones, with the entry of the biggest opponent Apple, is also about to enter the stage of hand-to-hand combat.

So, what experience improvements may users get after accessing the Alibaba version of "Apple Intelligence"?

Judging from the feedback from overseas users who have been using it for a period of time, Apple Intelligence, which is supported by OpenAI, is mainly a deep integration of ChatGPT. Especially when Siri encounters a complex problem that is beyond its processing power, it hands over the task to ChatGPT to handle.

Some review bloggers said on social platforms that the new version of Siri can support more complex semantic understanding, interruption or repetition. The user first asked Siri to set a 10 o'clock alarm, then interrupted and replaced it with a 10-minute countdown timer. Siri can easily recognize that the previous command no longer needs to be executed, and quickly execute the new command.

When asked more complex questions such as "teach me how to make cola chicken wings" or "help me make a three-day, three-night trip plan in Los Angeles", Siri said it needed to call ChatGPT to answer. In the case of recognizing the correct semantics, ChatGPT can basically give users satisfactory answers.

Apple Intelligence has also introduced visual intelligence features, such as camera controls through the iPhone 16, combined with OpenAI's image analysis capabilities, which allow users to gain a deeper understanding of their subjects.

For example, a user asks a bicycle in English, "What can I do with it?" Siri will first ask if to call ChatGPT to answer, and after the user confirms, ChatGPT will start to recognize the image and give an answer. The user then asked him to translate the reply into Chinese, and ChatGPT responded and executed quickly.

But on the whole, overseas users' evaluation of Apple's AI functions is still polarized. Many users complained that the overall performance of Apple's AI function is still relatively weak, "there is not much difference between there and not".

In particular, "the accuracy of camera recognition is very poor, and it can only be accurately recognized in an easy-to-read environment." This is not necessary for people with normal cognition." And the "AI elimination" function of the photo is difficult to eliminate the picture when it encounters complex points.

After the iPhone is connected to the Ali model, in addition to the existing AI functions of the iPhone, it remains to be seen whether it will link with domestic App manufacturers and collide with new experiences.

"Apple's partnership with OpenAI is primarily focused on generative AI technologies, such as the integration of ChatGPT, to enhance and extend Siri's capabilities. Through the cooperation with Alibaba, Siri will be able to provide users with better localization services in the Chinese context. Ethan Qi said.

Ethan Qi also believes that "AI mobile phones" are still a new concept for most consumers, and the blessing of AI by mobile phone manufacturers does not necessarily mean that their sales can be greatly increased in the short term. Mobile phones without AI capabilities already mean "falling behind" in the "arms race" in the high-end market.

IDC predicts that China's next-generation AI mobile phone market shipments will reach 118 million units in 2025, a year-on-year increase of 59.8%, and the overall market share will reach 40.7%.

Recently, the landing of the end-side large model of domestic mobile phones has been significantly accelerated, and the smell of gunpowder is unprecedentedly strong. The explosion of DeepSeek has triggered a competition for the speed of mobile phone manufacturers.

On February 5, Huawei took the lead in announcing that the "Xiaoyi App" in its pure-blooded Hongmeng system was the first to launch the beta version of DeepSeek-R1. In the following days, Honor, OPPO, Meizu, Nubia, and vivo all officially announced that their mobile phones would be connected to the DeepSeek-R1 model.

Only Xiaomi mobile phones seem to be still "stubbornly resisting", but in January, Lei Jun was rumored to have recruited former DeepSeek member Luo Fuli with an annual salary of 10 million yuan to help improve Xiaomi's self-developed large model.

On February 12, Samsung also announced a partnership with Zhipu, and Agentic GLM will be the source of AI capabilities for its new Samsung phone, the Galaxy S25, to help it process multimodal data such as text, voice, images and videos.

So far, the mainstream mobile phone brands in the domestic market have all completed the integration and deployment of AI and hardware. According to industry insiders, 2025 will become the "first year of real AI mobile phones".

03. Who benefits the most, and who wants to catch up?

In any case, after nearly two years of arduous negotiations, the "marriage" between Ali and Apple is great news for both parties.

Ethan Qi told Financial World that at present, AI manufacturers need to spend a lot of energy to acquire C-end users in a short period of time. Apple has 250 million users, and cooperation is the most convenient way to increase the order of magnitude of users for the Tongyi Qianwen model.

Not only that, the users brought by Apple can make full use of the inference computing power of Tongyi Qianwen, and the actual data used by users can "feed" back to the large model, so that Tongyi can be improved in service.

On this basis, as a cloud service provider that provides customized AI infrastructure services for Apple, Alibaba Cloud is also expected to enhance its competitiveness in the global cloud market, attract more B-end users, and improve its bargaining power.

For Apple, whether it can use AI partners to settle down and increase sales is a top priority.

Apple's financial report for the first quarter of fiscal year 2025 shows that its business revenue in Greater China was US$18.513 billion (about 134.376 billion yuan), down 11.1% year-on-year from US$20.819 billion in the same period last year.

Apple CEO Tim Cook explained the decline in performance, saying that Apple has not yet launched Apple Intelligence in the Chinese market as one of the reasons.

Zhong Xiaolei also told "Financial World" that for Apple, consumers have been looking forward to AI services for a long time. The smooth implementation of AI services can help Apple bridge the gap between AI services and local manufacturers, and boost the demand for replacement to a certain extent.

However, considering the severe competition in the domestic mobile phone market, especially in the context of Huawei's strong recovery, there is still a question mark over whether Apple can achieve a sales turnaround by relying on AI services alone.

"In the short term, AI functions may provide limited boost to machine replacement. This is because most of the current application scenarios are replaced by the cloud, which does not depend on device-side performance. However, in the long run, system-level AI integration is conducive to improving user stickiness for manufacturers. Zhong Xiaolei said.

And the company that missed this cooperation with Apple is Baidu.

At the end of 2022, after ChatGPT was born, Baidu's Wenxin Yiyan was once the earliest generative AI product released in China at that time. In June 2023, Baidu released version 3.5 of the Wenxin large model, which was once regarded as "basically on par with GPT-3.5" in the industry. Subsequently, Baidu released Wenxin Model 4.0, which has a generation capacity of seven or eight percent of GPT-4, and the price is only one-third of it, far exceeding industry expectations.

These performances also once brought Baidu into Apple's field of cooperation.

But starting in 2024, Baidu's technology upgrade seems to have slowed down. In the domestic AI field, products such as Doubao, Kimi, Kuaishou Keling, and DeepSeek have rapidly emerged to refresh user cognition. Baidu's search ability is also being hit by content platforms represented by Xiaohongshu and Douyin, as well as a new generation of AI search engines.

After "losing" Apple's AI, Baidu urgently needs to grab AI's next ticket.

On February 11, Robin Li said at the "World Governments Summit 2025": "I believe that cost reduction is the essence of innovation. Today, the pace of innovation is much faster than before. ”

Two days later, Wenxin announced on its official website that it will be free of charge from 0:00 on April 1, and all PC and App users can experience the latest models of the Wenxin series. At the same time, the official website announced that the in-depth search function will be launched from now on.

According to the report of intelligent emergence, on February 12, Baidu Intelligent Cloud Business Group (ACG) held an all-staff meeting. At the meeting, Shen Dou, executive vice president of Baidu Group and president of Baidu Intelligent Cloud Business Group, said frankly that although ACG will achieve a 20%~50% increase in annual revenue, gross profit, and KA customer subscriptions in 2024, the situation of large models is still anxious.

Shen Dou said that the demand for multimodality will be further increased in the future, and the focus of the industry will shift from training to inference, and multimodality will become the mainstream demand. At the application layer, Shen Dou said that the next department should focus on the pan-marketing field and further optimize the effect on applications such as sales and customer service.

Regarding the impact of DeepSeek on Baidu, Shen Dou believes that DeepSeek will have an impact on Baidu in the short term, but in the long run, the benefits outweigh the disadvantages. He mentioned that even though everyone is now seeing companies catching up with each other, the industry as a whole is still in its very early stages.

In addition, according to media sources, there are still opportunities for cooperation between Baidu and Apple. It is reported that Baidu has been developing an artificial intelligence search function that can process both pictures and text, and has upgraded the Chinese version of Siri voice assistant. These features are part of the Apple Intelligence suite of features.

Author | Lin Xiaokui

Edit | Li is not clear

Image Source | Visual China