Washington Pushes Back Against Apple’s Plan to Integrate Chinese AI on iPhones

Apple views the integration of advanced artificial intelligence features as essential to the future success of the iPhone. However, ongoing geopolitical tensions between the United States and China threaten to disrupt the company’s efforts to bring AI innovations to its crucial Chinese market.

In recent months, U.S. White House and congressional officials have intensified their examination of Apple’s intended collaboration with Alibaba, aimed at deploying the Chinese tech giant’s AI capabilities on iPhones sold in China. Their concerns center on the possibility that this partnership could enhance Alibaba’s AI development, expand the reach of Chinese chatbots subjected to state censorship, and increase Apple’s vulnerability to Chinese regulations on data privacy and content control.

This heightened scrutiny exemplifies the broader challenges Apple faces in balancing its business operations between the U.S. and China amid escalating geopolitical friction. For instance, the U.S. government successfully pressured Apple three years ago to abandon a planned deal to acquire memory chips from China’s Yangtze Memory Technologies Corporation. More recently, tariffs imposed on Chinese-made products, including iPhones, have posed additional risks to the company’s profitability.

Abandoning the Alibaba partnership would carry significant consequences for Apple’s presence in China, which represents nearly 20 percent of the company’s global sales. The deal is pivotal for integrating AI functionalities into iPhones within one of the most regulated and competitive smartphone markets worldwide. Without this collaboration, Apple risks losing ground to domestic competitors such as Huawei and Xiaomi.

U.S. government representatives, including officials from the White House and the House Select Committee on China, have directly engaged Apple executives to discuss the specifics of the deal. These discussions have focused on the terms of the agreement, the nature of data sharing between Apple and Alibaba, and any legal obligations Apple might assume under Chinese regulatory frameworks. Reports indicate that during a March meeting with the House committee, Apple’s executives were unable to provide clear answers to many of these inquiries.