Apple Partners with Baidu for AI Services in China

Apple Partners with Baidu for AI Services in China

Apple is reportedly set to incorporate AI services from Chinese tech giant Baidu into its iPhone 16 and other products sold in China, according to reports from Chinese media. The move comes as Apple CEO Tim Cook visits the country, where he recently opened a new retail store in Shanghai.

Sources familiar with the matter told Cailian Press that Baidu will become Apple's local generative AI model provider for the iPhone 16, Mac computers, and the upcoming iOS 18 mobile operating system. The collaboration is a result of regulatory requirements in China, which mandate the use of Chinese-made AI models for products sold in the country. Baidu's AI services will only be integrated into Chinese versions of Apple products, while the U.S. tech giant will continue to use its own AI model outside China.

The Wall Street Journal previously reported that Apple had engaged in preliminary talks with Baidu about utilizing its AI technology. Prior to selecting Baidu, Apple had also discussed potential partnerships with Alibaba and another Chinese company that provides large-language models.

Chinese regulators require generative AI models to receive approval before being launched to the public. Baidu's Ernie Bot is among the more than 40 models that have already been granted approval. The partnership with Apple is expected to significantly boost Baidu's brand recognition and solidify its position in the competitive Chinese AI market, where leading international players like OpenAI's ChatGPT and Google's Gemini are currently unavailable.

Nomura analyst Jialong Shi described the potential collaboration as "a perfect branding campaign for Baidu and its AI product, Ernie Bot." Ann Romain from the Zephirin Group noted that Baidu's AI development efforts have surpassed analysts' expectations, with faster-than-anticipated monetization. Baidu CEO Robin Li projected that the company's AI cloud businesses would become a main revenue driver in 2024, with revenue expected to rise sharply to "several billion yuan."

The news of the collaboration has already had a positive impact on Baidu's stock, with shares rising 5.4% in Hong Kong on Monday morning, even as the benchmark tech index declined by 0.2%. As Apple continues to expand its presence in China, the integration of Baidu's AI services into its products marks a significant step in adapting to the country's regulatory landscape and leveraging local technological expertise.

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