Apple's launch of Alibaba's AI services in China, Beijing regulators are continuing as technology partnerships become the latest casualties in Donald Trump's trade war.
Technology giants have been working together to provide Chinese users with the iPhone-M-Maker suite Apple Intelligence (iPhone Maker's AI service suite). The system will be powered by Alibaba's latest models.
Several AI products jointly developed by technology companies have been submitted to China Internet authorization for approval this year.
But their apps are stuck at the China Cyberspace Administration (CAC), two people familiar with the matter said the cited increase in geopolitical uncertainty between China and the United States.
Apple has suffered particularly from tensions between Washington and Beijing, despite CEO Tim Cook's efforts to win favor with the White House before Trump's second term.
The U.S. president put pressure on Apple, which has driven its growth into one of the world's most valuable companies in the world to bring production back to the United States.
Last month, Trump threatened Apple and Samsung to have a 25% tariff on its devices unless the company re-made manufacturing.
Apple's stock price has also been hit by its slow global launch of AI capabilities, which has made it a key selling point for its latest iPhone models, as well as regulatory and legal actions that threaten its high-margin services business.
The delay in releasing Apple intelligence in China has also troubled the U.S. company as it faces growing competition from Chinese competitors led by Huawei, Xiaomi, Oppo and Vivo.
Apple and Alibaba's partnership delays are because the United States and China are two of the world's largest economies and are negotiating to reduce tariffs on selling tats, which are as high as 145%.
All companies seeking to provide productive AI services to the Chinese public require a CAC approval process, which often involves formal testing of AI models. So far, CAC has approved more than 300 domestic AI models for use.
While Apple's partnership with Alibaba won CAC approval, high-profile relations have attracted regulatory scrutiny as trade tensions with the United States escalate.
Beijing is also seeking leverage in trade negotiations by resuming investigations into US tech giants such as NVIDIA and Google.
One person who knows the Apple-Alibaba partnership said Beijing has now spent longer reviewing any deals or partnerships related to the United States, especially in key areas such as AI.
The final approval needs to be cleared by a higher agency of the State Council, and the country's parliament is also engaged in U.S.-China trade negotiations.
But the person added that all such delays would change and that the application could be reviewed quickly once the State Council approved it.
According to another familiar with the discussion, the U.S. Department of Commerce Industry and Security Agency also expressed concerns about its cooperation with Apple and Alibaba, although it has no legal means to stop it.
Alibaba Chairman Joe Tsai said in February that the company would provide technology for AI-AI iPhone models sold by Apple in China, confirming reports on the partnership that fueled the rally of Chinese group stocks.
Meanwhile, Apple's market share has been in China. According to International Data, at the beginning of 2023, Apple had a 70% share of China's high-end smartphone market, while Huawei had a 13% share. By the first quarter of this year, Apple's share had fallen to 47%, while Huawei's share was 35%.
Apple declined to comment. Alibaba, CAC and China's State Council did not respond to requests for comment.