Apple Discusses Cooperation With Tencent And ByteDance For AI Features In China

JAKARTA Apple Inc. is reportedly in the middle of initial talks with two Chinese technology giants, Tencent and ByteDance, regarding the integration of their artificial intelligence (AI) model into iPhones sold in China. This information comes from three sources who declined to be named because the discussion has not been officially announced.

This step follows the launch of OpenAI's ChatGPT to Apple devices in various countries this month. The technology allows Siri, Apple's voice assistant, to use chatbot expertise to answer various user questions, including photos and documents. However, because ChatGPT is not available in China and regulations in the country require generative AI services to obtain government approval, Apple must cooperate with local partners.

ByteDance, owner of TikTok, declined to comment, while Apple and Tencent have yet to provide a response to a request for confirmation.

Cooperation with Apple can provide huge profits for Tencent or ByteDance amid increasing competition in the development of AI models in China. A number of large companies such as Baidu, with their AI model named Ernie, as well as local startups have launched various large language models (LLM). ByteDance has the Douba model, while Tencent offers Hunyuan.

Previously, Apple was also said to be exploring cooperation with Baidu, but the talks reportedly faced technical problems, including disputes over the use of iPhone user data to train AI models. Until now, Baidu has not provided an official response.

Tencent shares rose 2.3% following this report, while Baidu's shares in Hong Kong fell 4.2%, lower than the 0.6% drop in the Hang Seng Index.

The absence of the AI feature on the latest iPhone is a big challenge for Apple in the world's largest smartphone market. Apple is facing pressure from local brands, especially Huawei, which is returning to the premium mobile market by launching the Mate 70 series which is equipped with their large language model-based AI features.

Apple's smartphone sales in China fell 0.3% in the third quarter of 2024 compared to the previous year, while Huawei recorded a sales spike of up to 42% in the same period, according to IDC data. Previously, Apple had dropped out of the list of the top five smartphone vendors in China in the second quarter before returning to that position in the third quarter.