Apple Intelligence Has a Long Road to Launch in China
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Apple is reportedly in talks with ByteDance and Tencent to integrate their AI models with Apple Intelligence in China to expand its feature set for the lucrative market.
Apple is slowly rolling out Apple Intelligence to iPhones, iPads, and Macs, gradually rolling it out to new markets. But to do so in China, the company is looking to other companies for help.
Apple is said to be in talks with Tencent and TikTok owner ByteDance about Apple Intelligence. Reuters reported on Thursday that Apple wants to use AI models from the two companies to refine the version of Apple Intelligence offered to users in China.
The talks are at an early stage and have not been publicly disclosed, the sources said. None of the three companies responded to the report's request for comment.
Apple Intelligence Partner Problems
The problem for Apple is that it has to comply with regulatory restrictions in China, as in other countries around the world. The Chinese government must allow AI providers to offer services to consumers, and Apple has not received such approval for Apple Intelligence features.
To get around the rules, Apple intends to use a move it has made before: partnering with a company in China that has already received approval to work there.
Models like Google's Gemini and OpenAI's ChatGPT are not authorized in China, so Apple cannot use them. Instead, she has to turn to local tech companies.
Its first attempt with Baidu, the equivalent of China’s Google, ran into trouble, according to reports on December 4. Baidu already handles search for iPhone users in the country, making the tie-up a natural progression for the business relationship.
However, Baidu’s large language models (LLMs) failed to provide the answers Apple wants due to a lack of ability to personalize responses for the user. Part of the breakdown is Baidu’s desire to store user data to improve its learning, something that privacy-minded Apple doesn’t want to allow.
With Apple needing to find a local partner, the latest contenders are Tencent and ByteDance.
Tencent is another big tech company with a sprawling empire spanning social media and online gaming, cloud computing and payment systems. ByteDance is the firm behind TikTok, which has been working to improve its own models for delivering content to users around the world.
Both companies have extensive experience running their own LLMs, making them potential partners for Apple Intelligence.
One of the regulatory issues Apple faces in China is data ownership, as the government wants Chinese users’ data to be kept in the country rather than overseas.
Apple already meets this requirement for iCloud user data, as Chinese firm Guizhou-Cloud Big Data (GCBD) is the legal owner of the data in China. This arrangement effectively allows Chinese authorities to demand access to data owned by GCBD rather than Apple, protecting Apple from issues with U.S. regulations that prevent such requests.
It’s likely that any agreement with a firm in China that includes Apple Intelligence would address the data ownership issue in the same way.
The specter of Chinese government ownership is also apparent for any company Apple does business with in China. The government has a stake in Tencent’s domestic subsidiary, likely making it easier for Chinese regulators to demand access to user data.
There are similar concerns in the West that China has influence over ByteDance, so it could potentially have access to TikTok user data from around the world. This has led to legal challenges in the United States and the possible sale of the social network.
This potential access to user data is likely one of the main factors behind China’s domestic data retention rules.
A Lucrative Partnership
Apple has only one real goal in these negotiations. It wants Apple Intelligence to be available in China.
This is critical for Apple because it has lost some ground in China in terms of iPhone sales. With local competitors offering consumers their own AI-powered features, Apple’s lack of similar features makes the iPhone less attractive to consumers.
A successful partnership and expansion of Apple Intelligence in China gives Apple an opportunity to revive sales.
It’s such a concern that Apple CEO Tim Cook visited China in November after saying in October that Apple was “working hard” to debut Apple Intelligence.
As for when Apple Intelligence might actually become available in China, the earliest possibility is April 2025 as part of an expanded language support update. This depends on finding a local partner and working with them on the feature, and there is every chance it will happen later.
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