Apple’s Alibaba AI deal sparks concern in Washington

Apple’s partnership with Alibaba to deploy AI features on iPhones in China has triggered significant concern among U.S. officials and lawmakers. This development adds to Apple’s growing list of regulatory challenges while highlighting the geopolitical tensions surrounding AI technology development between the United States and China. The controversy comes at a critical time for Apple, which faces declining sales in China while needing a local AI partner to complement its global OpenAI collaboration for markets where ChatGPT cannot operate.

The big picture: U.S. government officials and lawmakers have raised alarms about Apple’s partnership with Chinese tech giant Alibaba to power iPhone AI features in China.

• National security concerns center on whether the partnership could inadvertently strengthen China’s AI capabilities or give Alibaba access to user data that could help refine its models.
• Apple has not yet publicly confirmed the partnership, though Alibaba’s chairman appears to have acknowledged it.

Why this matters: The controversy highlights the escalating technological competition between the U.S. and China, with AI becoming a central battleground for economic and security interests.

• Representative Raja Krishnamoorthi of the House Intelligence Committee called the deal “extremely disturbing,” comparing it to concerns that led to TikTok’s contested status in the U.S.
• Greg Allen from the Center for Strategic and International Studies emphasized: “The United States is in an AI race with China, and we just don’t want American companies helping Chinese companies run faster.”

Behind the scenes: Apple’s search for a Chinese AI partner became necessary after announcing Apple Intelligence with OpenAI’s ChatGPT integration, which cannot operate in China.

• The company reportedly explored potential partnerships with several Chinese tech firms including Baidu, DeepSeek, and Tencent before apparently settling on Alibaba.
• Alibaba’s open-source model Qwen has been gaining recognition for its rapid improvements in capabilities.

What’s at stake: The outcome could significantly impact Apple’s position in one of its most important markets.

• iPhone sales and overall revenue in China have been declining, creating pressure for Apple to deliver competitive AI features in the region.
• The next generation of iPhones is expected to launch in fall 2025, creating a timetable for resolving the controversy.

Potential consequences: U.S. officials have reportedly considered adding Alibaba and other Chinese AI firms to a restricted list that would prohibit collaboration with American companies.

• The Department of Defense and intelligence agencies are evaluating Alibaba’s potential ties to the Chinese military.
• White House officials and the House Select Committee on China have directly questioned Apple executives about commitments the company might be making under Chinese law.