Alibaba’s Hong Kong-listed shares surged by over 9% on Thursday, reaching a three-year high, after the company’s chairman, Joe Tsai, announced a partnership with Apple to integrate artificial intelligence (AI) features into iPhones sold in China. The news comes at a pivotal time for both companies, with Apple looking to regain momentum in the competitive Chinese smartphone market.
Speaking at the World Governments Summit in Dubai, Tsai expressed Alibaba’s pride in being selected by Apple for this collaboration. “They talked to a number of companies in China. In the end, they chose to do business with us. They want to use our AI to power their phones. We feel extremely honored to partner with such a great company,” Tsai said.
Alibaba’s shares rose as much as 9.2%, reaching HK$124.3, their highest level since January 2022.
Apple did not immediately comment on the announcement.
A Critical Partnership for Apple in China
The partnership comes at a crucial time for Apple, which has been struggling to maintain its market position in China. The company has faced declining iPhone sales, primarily due to stiff competition from domestic rivals, most notably Huawei.
Industry analysts have highlighted the lack of advanced AI features as a major disadvantage for Apple in China, where high-tech features are key selling points for the latest smartphones. Apple’s sales in China took a significant hit in 2024, as it lost its position as the country’s top smartphone vendor for the first time in years.
According to Canalys, Apple’s annual shipments in China dropped by 17%, allowing local brands to gain ground. Vivo now holds the largest market share at 17%, with Huawei close behind at 16%, pushing Apple to third place with just 15% of the market.
Alibaba’s AI Push and Growing Investor Confidence
Alibaba, on the other hand, has been making significant strides in the AI space. Its stock price has surged more than 40% so far in 2025, as investors have become increasingly bullish on the company’s AI capabilities.
In January, Alibaba launched the Qwen 2.5, a new version of its artificial intelligence model, which it claims outperforms DeepSeek-V3, a model that gained significant attention earlier this year for its capabilities and affordability. The company’s continued progress in AI is positioning it as a key player in the Chinese technology landscape, attracting both investor interest and strategic partnerships.
The collaboration with Apple marks a significant milestone for Alibaba, solidifying its role in advancing AI technology in the smartphone sector, particularly as global tech companies continue to race to enhance their products with cutting-edge artificial intelligence features.
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