Apple in Talks with Tencent, ByteDance to Roll Out AI Features in China: Reuters Sources

Apple is in discussions with Tencent and TikTok owner ByteDance to integrate their artificial intelligence (AI) models into iPhones sold in China, according to Reuters sources. This initiative follows Apple’s rollout of OpenAI’s ChatGPT on its devices globally. However, ChatGPT remains unavailable in China due to strict regulatory requirements, compelling Apple to seek local partnerships to implement AI features in the region.

The discussions with Tencent and ByteDance are at an early stage, with no public comments from the companies. These partnerships, if successful, could strengthen Apple’s AI capabilities in China while boosting Tencent and ByteDance’s standing in the country’s competitive AI market. Both companies are prominent players, with ByteDance’s Doubao and Tencent’s Hunyuan among the leading large language models.

Apple’s prior talks with Baidu over integrating its AI model reportedly stalled due to technical challenges and disputes over using iPhone user data to train AI models. Baidu’s shares fell 4.2% after the news, while Tencent’s shares rose 2.3%.

The lack of advanced AI features in Apple’s latest iPhones sold in China has become a significant hurdle, especially as the company faces growing competition from domestic brands like Huawei. Huawei’s Mate 70 series, powered by proprietary AI technology, has gained significant traction. According to IDC, Apple’s iPhone sales in China dropped 0.3% year-on-year in Q3 2024, while Huawei’s surged by 42%.

Apple’s declining market share in the world’s largest smartphone market underscores the urgency of securing partnerships with local tech giants like Tencent and ByteDance to roll out AI features tailored for Chinese consumers. As Apple pushes to maintain its competitive edge, integrating AI capabilities into iPhones in collaboration with local leaders like Tencent and ByteDance could be key to regaining momentum in China.