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According to a Chinese media outlet, China Star Market, Apple has selected Chinese search engine giant Baidu to provide generative artificial intelligence (AI) technology for its upcoming iPhone 16 and other products in the Chinese market this year.
The report suggests that Apple will incorporate Baidu’s Ernie Bot into its iPhone 16, Mac OS, and iOS 18 specifically for the mainland Chinese market, following discussions with various Chinese companies, including Alibaba Group Holding and an AI company affiliated with Tsinghua University.
While Apple will continue to use its own AI model outside of China, it opts for locally-built technology within the mainland market due to compliance considerations. Rumors have also suggested that Apple may get Google to put their Gemini AI bot into Baidu’s shares, which surged by up to 6 percent in Hong Kong following the news, closing at Hong Kong dollar 100 for the day.
This development follows initial talks between Apple and Baidu, reported by the Wall Street Journal last Friday, signaling a potential collaboration between the two tech giants. The decision to incorporate Baidu’s AI technology into Apple products in China coincides with Apple CEO Tim Cook’s recent visit to China, during which he reaffirmed Apple’s commitment to the Chinese market and engaged with vital Chinese suppliers.
During a high-profile summit hosted by the Chinese government, Cook commended the significant contributions of Chinese suppliers towards Apple’s carbon-neutral goals. Additionally, Cook announced Apple’s plan to launch its Vision Pro mixed-reality headset in the mainland market later this year, further underscoring the company’s focus on the Chinese market.
However, according to Counterpoint Research, Apple faces intensified competition in China, with iPhone sales declining by 24 percent year-on-year in the first six weeks of 2024. Increased competition from domestic rivals such as Huawei, Oppo, Vivo, and Xiaomi has contributed to this decline in iPhone sales.
The potential partnership between Apple and Baidu comes amidst Baidu’s collaboration with Samsung Electronics to integrate its Ernie large language model into Samsung’s latest flagship 5G devices. However, AI service providers in China are encountering heightened regulatory scrutiny, with authorities issuing new guidelines to ensure compliance with permitted content standards for AI-generated content. Last August, China implemented detailed regulations governing domestic generative AI services, positioning the country as a pioneer in regulating this emerging technology.
