Apple will integrate Alibaba's AI into iPhones in China, chairman Joe Tsai says

Alibaba Group Chairman Joe Tsai confirmed on Thursday that the company was partnering with Apple to roll out AI for iPhones sold in China, speaking at the World Governments Summit in Dubai.

"[Apple]  talked to a number of companies in China, and in the end, they chose to do business with us. They want to use our AI to power their phones," Tsia said. 

The partnership was first reported by tech-focused news organization The Information on Tuesday, triggering a jump in Alibaba and Apple shares. 

The announcement could provide clarity on Apple's AI strategy in China, especially as its market share erodes in the world's largest smartphone market amid increased competition. 

While domestic rivals such as Huawei have launched devices with AI features since last year, Apple has been quiet about its 'Apple Intelligence' push in the market, despite plans to launch in the U.S. this fall.

Apple Intelligence is the Cupertino-based company's play that aims to bring AI across its devices, featuring an improved version of its voice assistant Siri, as well as features that automatically organize emails and transcribe and summarize audio.

Analysts have told CNBC that Apple's AI rollout in China has likely stalled due to China's stringent rules. 

Beijing has enacted various regulations on AI over the past few years with some of the rules requiring large language models to get approval for commercial use. Generative AI providers are also responsible for taking down "illegal" content.

However, Tsai said Thursday that the Alibaba partnership could offer Apple a local partner to help navigate regulatory environment and localize its AI.