Apple (NASDAQ:AAPL) is reportedly in the early stages of discussions with Baidu (NASDAQ:BIDU) to integrate the Chinese firm's generative AI technology into Apple devices sold in China, marking another step in the iPhone maker’s pursuit to close the gap to its tech rivals in the AI market.
BIDU shares rose 5% in premarket trading Friday.
The move represents the latest Apple effort aimed at partnering with external AI experts to boost its technological capabilities, having already engaged in talks with Google (GOOGL) and OpenAI for similar collaborations.
The focus on a local AI model provider like Baidu stems from China's regulatory environment, which mandates the approval of such technologies by the country's cyberspace authority before public release, the Wall Street Journal’s report said.
Since the implementation of this regulation in August, over 40 generative AI models have received approval, with Baidu’s Ernie Bot among them. However, no foreign-developed models have been cleared, and it remains unclear if any have applied for approval. Notably, prominent AI models like OpenAI’s ChatGPT and Google’s Gemini are not accessible in China.
Although Apple's conversations with Baidu are at a preliminary stage and it's uncertain whether Apple has reached out to other Chinese AI firms, analysts suggest that partnering with a local AI provider could alleviate regulatory compliance challenges for Apple and enhance its competitive edge in China, particularly in developing Chinese-language AI solutions.
Chinese tech companies, including smartphone manufacturers Xiaomi and Honor, are also exploring incorporating small AI models into their devices.
“Apple will be a laggard in this space, and it would take tremendous innovation for them to outshine the rest,” said analysts at Omdia.
“The company’s strength is in introducing innovative use cases and killer apps for various technologies.”