Apple’s planned AI deal in China with Alibaba faces intense U.S. government scrutiny. Washington fears this partnership could boost China’s AI, risk data, and aid military-linked firms. This places Apple, reliant on its Chinese market, in a difficult geopolitical position.
The collaboration aims to bring AI to Chinese iPhones. However, White House and congressional officials have directly questioned Apple executives. Concerns focus on national security and Apple’s commitments under Chinese law, as reported by The New York Times.The outcome impacts Apple’s competitiveness in China, where iPhone sales have declined, according to 9to5Mac.
This scrutiny highlights Apple’s challenge: balancing U.S. interests with its significant Chinese operations. China represents nearly one-fifth of Apple’s sales. Failing to launch its “Apple Intelligence” there could further cede ground to local rivals like Huawei.
Washington’s Deepening Concerns
U.S. officials worry any Apple-Alibaba deal might strengthen China’s AI. Greg Allen of the Center for Strategic and International Studies stated, “The United States is in an AI race with China, and we just don’t want American companies helping Chinese companies run faster.” Lawmakers fear Alibaba could access user data or refine its AI models. Representative Raja Krishnamoorthi, a House Intelligence Committee member, called the deal “extremely disturbing.” He also expressed “serious concerns” that the partnership might help Alibaba collect data. Krishnamoorthi suggested Apple could “turn a blind eye” to the rights of Chinese iPhone users.
Officials are also reportedly evaluating Alibaba’s alleged ties to the Chinese military. Discussions have occurred about placing Alibaba on a restricted list, barring U.S. company collaborations. During a March 2025 meeting, Apple executives reportedly could not answer many specific questions from the House Select Committee on China regarding data protections, The New York Times noted.
Apple’s Necessary Path In China
Apple needs a Chinese partner for its AI features. OpenAI, its global AI partner, cannot operate in China due to local regulations. This forced Apple to seek a domestic firm. Reports from 9to5Mac in June 2024 indicated Apple explored potential deals with Baidu and Tencent, before an apparent focus on Alibaba. Apple has not publicly confirmed the Alibaba deal, though Alibaba’s chairman reportedly did.
The urgency for Apple is heightened by its market performance. Analyst Ming-Chi Kuo previously stated, “There is no evidence that Apple Intelligence has boosted iPhone replacement demand.” This makes a successful, localized AI offering critical. Without such a collaboration, Apple’s market share in China could further deteriorate. The path has been complex; earlier talks with Alibaba and Baidu reportedly stalled over data-sharing disagreements.
Broader Geopolitical And Market Pressures
The AI partnership scrutiny is not an isolated event for Apple. The company previously faced U.S. pressure over using Chinese supplier YMTC for memory chips. It also navigates U.S. tariffs on its Chinese-made goods. President Trump also directly urged Apple CEO Tim Cook to shift iPhone production from China and curb expansion in India, favoring U.S. manufacturing.
China mandates local hosting and pre-approval for generative AI. This regulatory environment compels foreign firms to partner locally. Samsung, for example, uses Baidu for AI in China. Apple’s own “Apple Intelligence” features, including enhanced Siri, are currently unavailable in China. Technology policy analyst Maria Chen, suggested the agreement “marks a big change in the way U.S. tech companies do business in China,” adding that its implications extend far beyond a typical business arrangement.
The significant challenges Apple faces were underscored by technology analyst Jennifer Wong, who said that the stakes for Apple are incredibly high as it attempts to navigate what she termed a “technology cold war” while striving to maintain its global leadership in high-end smartphones.
Last Updated on May 26, 2025 1:15 pm CEST
