Apple Inc. has partnered with Alibaba to bring artificial intelligence (AI) capabilities to the iPhone and ignored the US lawmakers’ appeal to halt all AI partnerships between the US and Chinese companies.
Apple’s shares rose to US$241.5 on Thursday, up 6.4% from Tuesday, when information first reported news. Alibaba’s Hong Kong listed stocks surged to 18% (US$15.9) from Tuesday through Friday.
Last year, Apple sold 42.9 million iPhones in China, down 17% from 2024. The company ranked third in the Chinese smartphone market, following Vivo and Huawei. For the fiscal year ending September 30, 2024, Apple generated approximately 17% of its revenue from China.
“Apple is always loud. They discussed with several Chinese companies and ultimately decided to partner with us,” Alibaba Chairman Joe Tsai said when he attended the World Government Summit in Dubai. He told reporters. “They want to use our AI technology to power their phones.”
Apple Intelligence
In June, Apple announced that it would release Apple Intelligence, an AI-powered personal intelligence system for iPhones, iPads and Macs.
He said the new feature will allow Apple chips to understand and create languages and images, perform actions through the app, and extract from personal contexts to simplify and accelerate everyday tasks.
In October, users of all iPhone 16 models and latest Apple devices, including iPhone 15 Pro and Pro Max, will begin using Apple Intelligence to rewrite messages and emails, prioritize notifications, and edit photos. It’s done.
For AI tasks that require large-scale computing power, users can use Apple Intelligence on their devices or Apple’s private cloud computing system.
According to the information, Apple had previously planned to work with Baidu, but the AI model of Chinese search engines discovered that it wasn’t what they wanted.
According to the report, Apple said it had little option to find a Chinese partner to obtain regulatory approved AI tools.
It is expected that iPhone users in China will be able to use Apple’s AI tools from around May.
Alibaba chatbot
It is unclear whether Apple needs to share AI data or technology with Alibaba, or whether iPhones sold in China will include Alibaba’s AI chatbots Tongyi Qianwen or Qwen.
Last May, Alibaba launched QWEN 2.5. This has 500 million to 110 billion parameters. In many cases, more parameters lead to more powerful models.
Openai’s ChatGPT3 has around 175 billion parameters, and ChatGPT4 has around 1.8 trillion parameters. The ChatGPT4 architecture consists of eight models, each with 220 billion parameters.
On January 28th this year, Alibaba announced the Qwen 2.5-Max. It claims to have been trained with over 20 trillion parameters. He said that Qwen 2.5-Max performs much better than DeepSeek.
It’s not surprising if QWEN2.5 can perform better than DeepSeek. In a research paper on January 22, Deepseek developers said they “distilled” the data from QWEN2.5 when training AI models.
During the “knowledge distillation” process, Deepseek is a student who continues to ask knowledgeable teachers such as ChatGPT and QWEN 2.5, using answers to fine-tune the logic.
In this case, QWEN2.5 is Alibaba’s teacher trained with critical computing power and data, while DeepSeek is just a student or a distilled version of other AI models.
Zhou Chang, an algorithm engineer at Alibaba and responsible for the Qwen2.5 AI model, left Alibaba in July last year and took a team of around 10 engineers to join the signing.
Media reports show that the annual salary for the year at Alibaba was around 2 million yuan (US$275,691). Zhou was given a package of at least 10 million yuan from compensation. However, Alibaba reportedly filed a lawsuit against him, claiming he had no right to join a competitor.
US restrictions
Last October, the Biden administration set Finaliszd to a set of rules aimed at banning US investment in certain national security technologies and products in mainland China, Hong Kong and Macau.
The rules, effective January 2nd this year, cover the AI, quantum and semiconductor sectors in China.
On January 29, Republican Sen. Josh Hawley introduced a bill titled “Separating American artificial intelligence capabilities from the 2025 China Act,” which included AI or generator AI technology or intellectual property. They are calling for a ban on imports and exports.
If passed by the US Congress, the law could ban people from “importing” iPhones powered by China’s AI technology. However, it remains a question of whether this bill will be passed.
Yong Ji-an is a contributor to the Asia Times. He is a Chinese journalist and specializes in Chinese technology, economy and politics.
Read: Trump skeptical of a call to ban full deepseek
